Hospitalization leave is a critical form of paid medical leave that safeguards employees during serious illness or injury. For employers, proper management of hospitalization leave isn’t just about compliance — it’s about maintaining fairness, empathy, and operational stability within the organisation.
This article explains what hospitalization leave in Malaysia entails, how it differs from ordinary sick leave, and what employers must do to remain compliant under the Employment Act 1955.
What Is Hospitalization Leave in Malaysia?
Hospitalization leave is a category of paid medical leave under the Employment Act 1955, granted when an employee is certified by a doctor to require hospital treatment, observation, or surgery.
Unlike ordinary sick leave, hospitalization leave applies when a medical practitioner deems hospital admission necessary — even if the employee is treated at home under medical observation. It ensures employees can focus on recovery while still receiving their wages, and employers stay within the law.
How Many Paid Sick Days Are Employees Entitled To in Malaysia?
Under Section 60F of the Employment Act 1955, the number of paid sick days depends on the employee’s length of service:
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14 days — if employed for less than 2 years
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18 days — if employed between 2 to 5 years
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22 days — if employed for more than 5 years
If hospitalization is required, the combined total of ordinary sick leave and hospitalization leave cannot exceed 60 days per year.
Example:
If an employee has used 18 days of outpatient sick leave, they will have 42 days remaining for hospitalization leave — not 60 days separately.
Difference Between Sick Leave and Hospitalization Leave
Is a Medical Certificate (MC) Required?
Employers can also verify that the MC comes from:
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A company-appointed panel doctor, or
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Any registered medical practitioner or government medical officer (if the panel doctor is unavailable).
Employees must notify the employer within 48 hours of starting sick leave. Failure to do so may result in the leave being treated as unpaid or unauthorised.
Can Hospitalization Leave Be Carried Forward?
No. Hospitalization and sick leave entitlements cannot be carried forward to the next calendar year. The entitlement resets annually.
Can Employers Refuse Hospitalization Leave?
Employers cannot refuse hospitalization leave if:
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The employee presents a valid medical certificate or hospital admission note.
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The employee’s entitlement (up to 60 days) has not been exceeded.
However, employers are entitled to verify authenticity if there is reasonable doubt — for instance, when there are suspicious patterns or inconsistent documents.
Is Hospitalization Leave Deducted from Annual Leave?
No. Hospitalization and sick leave are separate entitlements under the Employment Act. Employers must not deduct these days from an employee’s annual leave.
What If Hospitalization Leave Is Misused?
If an employer suspects abuse — such as forged MCs or false claims — they may request additional proof or verification from the hospital and conduct an internal inquiry.
If misuse is proven, disciplinary action may be taken, but employers must follow due process to ensure fairness.
When an Employee Can No Longer Work Due to Illness
If an employee remains unfit for work after exhausting all leave entitlements, employers may consider termination on medical grounds, but only after fair evaluation.
Best practices before making this decision:
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Obtain an independent medical opinion.
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Consider alternatives such as light duties or extended unpaid leave.
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Maintain complete documentation of all communications and reports.
Dismissal solely for exercising lawful medical leave rights can result in unfair dismissal claims under the Industrial Relations Act 1967.
Can Employers Terminate Employees on Long-Term Sick Leave?
Yes — but only under strict conditions. Employers must:
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Confirm via medical reports that the employee is permanently unfit for the role.
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Explore reasonable accommodations before termination.
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Use termination on medical grounds as a last resort, and only after a transparent process.
How Employers Can Manage Hospitalization Leave Effectively
1. Create a Clear Sick Leave Policy
Establish clear steps for applying for sick or hospitalization leave in your employee handbook.
Include:
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Required documents (e.g., MC, admission form).
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Notification timeline (e.g., inform HR within 48 hours).
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Contact points for submission.
2. Keep Accurate Leave Records
Maintain detailed leave records to avoid exceeding the 60-day cap. Use HR software like Pandahrms to automatically record, approve, and calculate sick leave entitlements in real time.
3. Communicate with Empathy
HR can maintain a positive employee relationship by showing genuine concern for staff well-being. A simple message or call during recovery helps build loyalty and trust.
4. Plan for Temporary Work Arrangements
To ensure business continuity:
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Reassign duties temporarily.
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Cross-train staff.
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Hire short-term replacements for critical roles.
5. Pay Salaries Promptly
Hospitalization leave is fully paid leave under Malaysian law. Employers must ensure payroll accurately reflects approved medical leave days. Using Pandahrms Payroll Module helps automate this process to prevent salary delays.
6. Handle Potential Misuse Fairly
Employers may verify suspicious MCs with hospitals and conduct a domestic inquiry if necessary. Always handle investigations privately and document every step.
7. Support Return-to-Work Transition
Employees may need time to recover strength. Offer light duties, flexible hours, or work-from-home options when possible.
8. Review and Update Leave Policies
Regulations and company needs evolve. Review leave policies annually to ensure compliance and train HR personnel to handle medical leave cases consistently.
Employer Checklist: Recording & Approving Hospitalization Leave
A clear SOP for hospitalization leave ensures consistency and compliance:
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Employee submits MC or hospital admission note.
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HR verifies and checks balance (max 60 days/year).
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Manager approves; HR records the leave.
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Payroll updates salary records accordingly.
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HR confirms approval to the employee.
With Pandahrms, this entire process is automated — helping HR teams manage leave applications, verification, and payroll integration in one central platform.
How Hospitalization Leave Affects Businesses
1. Productivity Disruptions
Extended employee absences may slow down workflows. Employers can minimise disruption through cross-training and clear work redistribution.
2. Additional Operational Costs
Employers must continue to pay wages during hospitalization leave and may incur extra costs for replacements or overtime.
3. Strain on Other Employees
Redistributing workloads may increase pressure on remaining staff. Employers should ensure fair duty allocation and provide support to avoid burnout.
4. Compliance Risks
Non-compliance — such as refusing valid leave or deducting annual leave — can lead to labour disputes or penalties from authorities.
Frequently Asked Questions (FAQ)
1. How many days of hospitalization leave are employees entitled to?
Up to 60 days per year, inclusive of ordinary sick leave.
2. Is hospitalization leave paid?
Yes. Employers must pay wages during approved hospitalization leave.
3. Can employees combine normal sick leave with hospitalization leave?
Yes, but the total cannot exceed 60 days in a year.
4. What documents are required?
A valid medical certificate or hospital admission form issued by a registered practitioner.
5. How can employers handle abuse?
They can verify the MC with the clinic or hospital, conduct an inquiry, and take action if misuse is proven.
6. Does this apply to foreign employees?
Yes, hospitalization leave applies equally to both local and foreign employees under the Employment Act 1955.
Simplify Leave Management with Pandahrms
Managing hospitalization leave doesn’t have to be complex. With Pandahrms, HR teams can:
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Track all types of leave in real time.
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Automate leave calculations and payroll sync.
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Maintain compliance effortlessly with built-in policy settings.
