The Gig Workers Act 2025 (“GWA”) came fully into operation on 31 March 2026. The primary purpose of the GWA is to provide a legal framework which protects the rights of individuals participating in the gig economy.
Are all independent contractors automatically considered gig workers? Not exactly.
A critical first step for any contracting entity or service provider is determining whether their relationship falls under the GWA. Accurate classification ensures that a gig worker is treated accordingly and is provided the minimum entitlements mandated by law, which may vary depending on whether the contracting entity is an individual, sole proprietor, incorporated company or platform provider / digital intermediary system provider.
How to Determine if a Service Provider is a Gig Worker?
To determine if a service provider is a gig worker:
- Non-Employee: The service provider must not be an employee. Employees are covered under the Employment Act 1955 instead.
- Individual Status: The service provider must be an individual. Services provided through a corporate entity service provider are not covered under the GWA.
- Citizenship/Residency: The individual must be a citizen or permanent resident of Malaysia. Foreign individuals are excluded from GWA coverage.
- Receipt of Earnings: The individual must receive earnings for their services. “Earnings” refers to payment stipulated in a service agreement, but excludes voluntary tips, gratuities and other benefits. Services performed on a purely voluntary basis are not considered as gig work under the GWA.
- Engagement via a Platform Provider: If the individual is engaged by a platform provider or digital intermediary system provider that connects them to a service user, they are automatically classified as a gig worker regardless of the industry.
- Non-Platform Engagement for Specific Service Roles: If the contracting entity is not a platform provider, the service provider is considered a gig worker only if they perform specific services and roles:
- Creative Arts & Media: Actors, film production crew, singers, musicians, composers, lyricists, journalists, stringers, photographers and videographers.
- Translation Services: Sign interpreters, interpreters, translators, and transcribers.
- Specialised Care or Treatment: Caregivers providing prenatal, postnatal, palliative, elderly or rehabilitation care.
- Aesthetics: Make-up artists, hair stylists and stylists.
If the service provider does not meet the requirements above, they are not a gig worker and should be treated as an independent contractor, with the engagement governed by general contract law rather than the GWA.
Key Implications of Classification
If the individual service provider is a gig worker, the GWA provides, among other things:
- Earnings: Right to pre-agreed rates, timely payment of earnings and protection against unlawful deductions.
- Protection Against Termination: Right not to be terminated without just cause and excuse.
- Non-Exclusivity: Right to provide services to multiple parties.
- Access to Gig Workers Tribunal: Mechanism for resolving disputes.
- Additional Rights – Platform Providers: Gig workers engaged via platforms are entitled to additional rights, such as SOCSO contributions, due inquiry processes, etc.
If the individual service provider is NOT a gig worker under the GWA, they should be treated as an independent contractor where:
- Engagement terms are governed primarily by the written contract.
- There is no statutory entitlement to GWA protections.
- Disputes are resolved under general civil or commercial law.
Why Accurate Classification Matters
Accurately classifying a service provider is essential to ensure legal compliance and avoid significant liabilities. Under the GWA, a general contravention of the GWA, including failing to provide minimum entitlements to a gig worker, carries a penalty of up to RM50,000 in fines and/or 2 years of imprisonment.
Businesses should immediately:
- Review existing arrangements to identify individuals who meet the new statutory definition of a gig worker.
- Ensure gig worker contracts are not terminated without just cause and excuse.
- Update all gig worker service agreements to reflect the mandatory terms of the GWA.
- Update internal processes, such as to accommodate mandatory SOCSO contributions (if a platform provider).
Proactive management will mitigate the risk of reputational damage and potentially costly claims.
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This article was written by Adelyn Fang (Associate) from Donovan & Ho’s employment law practice.
Donovan & Ho is a law firm in Malaysia, and our employment practice group has built a reputation for providing strategic employment advice to local and global organisations. Our team of employment lawyers provide advice on employment law and industrial relations including review of employment contracts, policies and handbooks, advising on workforce reductions, and managing dismissals of employees for poor performance or misconduct. We also represent clients in unfair dismissal claims and employment-related litigation. Have a question? Please contact us.
