Published On: 09/01/2026By

Chinese New Year Closures: Employers Cannot Force Annual or Unpaid Leave, Says HR Ministry

Chinese New Year 2026 falls on Tuesday, 17 February, and as businesses begin planning operational schedules around the festive period, a common HR question resurfaces every year:

Can employers force employees to take annual leave or unpaid leave before or after Chinese New Year?

The short answer is NO — and the Ministry of Human Resources (MOHR) has made this clear.

This article explains what Malaysian employers need to know, what the law says, and how to manage CNY closures without violating employee rights.

Ministry of Human Resources’ Official Clarification

On 7 February 2024, the Ministry of Human Resources addressed complaints from employees who were forced to take annual leave or unpaid leave when companies temporarily closed operations before or after the Chinese New Year holidays.

The Ministry clarified that:

Employers are not allowed to force employees to take annual leave or unpaid leave during business closures beyond the official public holidays.

This clarification remains highly relevant for Chinese New Year 2026 planning.

Public Holidays vs Business Closure: What’s the Difference?

Chinese New Year is gazetted as a public holiday, but many companies choose to close operations longer than the official holiday period.

📌 Important distinction:

  • Public holidays → Employees are entitled to paid leave

  • Additional closure days decided by the employer → Cannot be deducted from employees’ annual or unpaid leave without consent

If an employer chooses to close the business beyond the public holidays, the cost of that decision cannot be shifted to employees.

Can Employers Decide When Leave Is Taken?

Yes — but only to a certain extent.

While employers have the right to approve or reject leave applications, the Ministry emphasised that:

  • Employees retain the right to decide when they apply for leave

  • Annual leave and unpaid leave must be voluntary and requested by the employee

  • Leave should not be imposed to reduce operational costs

Annual and unpaid leave are employee entitlements, not tools for cost-cutting.

Is It Legal to Force Unpaid Leave During CNY Closure?

❌ No.

The Ministry clearly stated that employers must not force unpaid leave on employees simply because the business is closed.

Unpaid leave:

  • Is not automatic

  • Must be requested and agreed upon

  • Cannot be imposed unilaterally

Forcing unpaid leave may expose employers to legal complaints and enforcement action.

What Should Employers Do Instead?

For employers planning CNY closures in 2026, consider these lawful alternatives:

✔ Plan business closures early and communicate clearly
✔ Treat additional closure days as company-paid leave, if applicable
✔ Offer optional leave applications (with employee consent)
✔ Implement fair work arrangements such as shift rotation or staggered operations
✔ Ensure HR policies are aligned with the Employment Act 1955

Good planning prevents disputes — and protects employer reputation.

What Can Employees Do If Forced to Take Leave?

The Ministry urges employees who are forced to take annual or unpaid leave to:

📍 Lodge a complaint with the nearest Labour Department (JTKSM)

This is provided under Section 69 of the Employment Act 1955 (Act 265).

Employers found in violation may be subject to investigation and penalties under labour law.

Key Takeaways for Employers Ahead of CNY 2026

As Chinese New Year 2026 approaches, employers should remember:

  • Annual leave and unpaid leave must be voluntary

  • Business closures do not justify forced leave

  • Employees have the right to decide when to apply for leave

  • Compliance protects your company from disputes and enforcement risks

A clear, compliant leave policy ensures smoother operations and stronger employee trust during festive periods.

How Pandahrms Helps Employers Manage Leave Properly

Managing leave requests, approvals, and company-wide closures can be complex — especially during festive seasons like Chinese New Year.

With Pandahrms Leave Management, employers can:

  • Set clear leave policies

  • Track public holidays and company closure days

  • Manage leave requests with proper approval workflows

  • Ensure compliance with Malaysian labour laws