The government has announced an additional public holiday on 15 September to celebrate Malaysia Day. While many welcome an extra day of rest, business and employer groups have voiced concerns about the financial and operational impact of this sudden holiday on the Malaysian economy.

The Financial Impact on Malaysian Businesses

The Malaysian Employers Federation (MEF) has highlighted that surprise public holidays can significantly affect businesses. The federation explained that such holidays can interrupt production schedules and delay deliveries, affecting a company’s ability to operate efficiently. These disruptions often lead to lower output and increased costs, particularly for small and medium enterprises (SMEs) that run on tighter budgets.

According to the MEF, the financial cost is substantial. Initial estimates show that a single extra public holiday could cost Malaysian employers more than RM1 billion in total due to increased wage bills for those who need to work. MEF also noted that frequent, unplanned holidays might affect Malaysia’s reputation as a stable and predictable place for investment, as investors prefer certainty in government policies.

Challenges for Small and Medium Enterprises (SMEs)

Small and Medium Enterprises Association (Samenta) shared similar worries, emphasising that holidays announced at short notice are especially disruptive for smaller businesses. The association stated that the extra day off increases costs through lost productivity, overtime pay for employees who work, and potential delays in fulfilling customer orders.

Samenta also urged the government to conduct thorough studies on the potential economic effects before declaring unscheduled public holidays in the future. While appreciating the recent positive economic news from the government, the association also called for more support to help SMEs manage ongoing challenges. These include difficulties in accessing financing, dealing with labour shortages, and adapting to rising operational costs.

What the Holiday Means for Employees

In response to these concerns, the Ministry of Human Resources has clarified the obligations for employers. Human Resources Minister Steven Sim confirmed that all employers must observe the additional public holiday declared for 15 September.

For employees, this means you are entitled to a day off with your regular pay. If your employer requires you to work on a public holiday, they must compensate you according to the public holiday pay rates stipulated under labour laws. Alternatively, your employer can grant you a replacement holiday on another day in exchange for working on 15 September 2025. 

• TAGS:
• Malaysia Employer's Federation
• MEF