Most foreign-invested factories in Malaysia budget carefully for the foreign worker levy, the recruitment agent and the flight — and then house the workers in whatever shoplot upstairs unit the local supervisor found, on the assumption that accommodation is a landlord problem. It is not. Since 1 September 2020 the housing of employees in Peninsular Malaysia and Labuan has been governed by Part IIIA of the Employees' Minimum Standards of Housing, Accommodations and Amenities Act 1990 [Act 446], which makes it an offence to provide accommodation at all unless that accommodation carries a Certificate for Accommodation issued by the Director General of Labour. From 1 March 2026 the maximum rent you may recover from a worker rose from RM100 to RM150 a month under P.U.(A) 49/2026 — and the right to charge anything at all is conditional on holding the certificate you may not have. This guide sets out what the gazetted text actually says, section by section and figure by figure, because a striking amount of what circulates online about Act 446 is wrong in ways that cost money.
Two halves of one Act, and why the confusion matters
Act 446 began life in 1990 as the Workers' Minimum Standards of Housing and Amenities Act — a plantation statute. Part II (housing, nurseries, community halls, land for cultivation) and Part III (estate hospitals, medical treatment, sanitation) were written for estates, and section 2(1) expressly disapplies Part II to any place of employment inside a City Council, Municipal Council or Federal Territory area.
That is the Act most search results still describe. It is not the Act that binds your factory. The Workers' Minimum Standards of Housing and Amenities (Amendment) Act 2019 [Act A1604], in force from 1 June 2020, renamed the statute, extended it to the Federal Territory of Labuan, and inserted an entirely new Part IIIA — Accommodations, which by section 24A "shall apply to employees who are employed otherwise than to work in an estate." Everyone off an estate. Factory operators, construction firms, logistics yards, restaurant groups, cleaning contractors.
| Question | Answer under the current text |
|---|---|
| Where does the Act apply? | Peninsular Malaysia (from 1 December 1990) and the Federal Territory of Labuan (from 1 June 2020). Sabah and Sarawak have their own labour ordinances and are outside Act 446 |
| Does Part IIIA apply only to foreign workers? | No. Part IIIA speaks of "employees". A Malaysian employee housed by the employer is covered on identical terms |
| Does it apply if I rent the premises rather than own them? | Yes. The obligation attaches to the employer who provides accommodation, whatever the tenure of the building |
| Who else can be liable? | A "centralized accommodation provider" — a person who provides and manages housing for one or more employers, i.e. a commercial workers' hostel or CLQ operator. An employer housing only his own staff is not a provider |
| What is a "person in charge of accommodation"? | A named individual, appointed by the employer or provider, responsible for management, safety and health at the accommodation (section 24L) |
The Certificate for Accommodation — and the threshold that does not exist
Section 24D(1) is one sentence long and admits of no exceptions on its face: no accommodation shall be provided to an employee unless certified with a Certificate for Accommodation. The application is made by the employer or the centralized accommodation provider to the Director General of Labour, in the form and manner he determines, with the prescribed processing fee. Applications run through the Labour Department's dedicated portal at akta446.mohr.gov.my, and the certificate is administered by JTKSM (Jabatan Tenaga Kerja Semenanjung Malaysia).
Two further points about the certificate are routinely misunderstood. First, the exemption that does exist is narrow: housing in estates and mines within District Council areas falls outside the certification requirement, which is a legacy of the plantation half of the Act — not a general small-employer carve-out. Second, section 24H is explicit that a Certificate for Accommodation does not displace other law. Notwithstanding section 24D, no employer or provider may use a building as accommodation if the building is unfit for human habitation under the relevant written laws — an offence carrying its own RM50,000 fine. Local-authority approvals, change-of-use consent, Bomba fire requirements and the certificate of completion and compliance for the building all remain live, and a JTKSM certificate does not cure a residential-use breach on a commercial-title shoplot. If you are still choosing premises, sequence that alongside the rest of the site approvals covered in our guide to setting up a factory in Malaysia end to end.
On practicalities, the statute leaves fee and validity to the Director General rather than fixing them, so treat published figures as market practice rather than law: application fees in the low hundreds to a few thousand ringgit depending on headcount and whether you apply as employer or as provider, a certificate cycle measured in years rather than months, and an inspection-driven approval that in practice runs several weeks from a complete submission. Budget the upgrade works — not the application fee — as the real cost. Renew well before expiry; there is no grace period in section 24D for a lapsed certificate, because the section is drafted around whether accommodation is certified, not whether you have applied.
The gazetted minimum standards, exactly as written
The substance sits in the Employees' Minimum Standards of Housing, Accommodations and Amenities (Accommodation and Centralized Accommodation) Regulations 2020 [P.U.(A) 250/2020], made under paragraph 25(2)(aa) and in force from 1 September 2020. The regulations split every accommodation into two classes — dormitory-form and non-dormitory-form — and the requirements differ between them in a way that catches people out.
| Requirement | Non-dormitory accommodation | Dormitory accommodation |
|---|---|---|
| Bedroom / sleeping floor area per employee | Not less than 3.6 m² per employee (bedroom) | Not less than 3 m² per employee (sleeping area) |
| Bathroom and toilet ratio (whether separate or combined) | 1 : 6 employees | 1 : 15 employees |
| Rest area | One | One |
| Dining area with chairs and tables | One | One |
| Kitchen area | One | One |
| Fans | In every rest area, dining area and bedroom | In every rest area, dining area and sleeping area |
| Lights | In every rest area, dining area, bedroom, kitchen area, bathroom and toilet | In every rest area, dining area, sleeping area, kitchen area, bathroom and toilet |
| Clothes-drying space | One | One |
| First aid kit | One | One |
| Dustbin | Required | Required |
| Water and electricity supply | Required (regulation 6) | Required (regulation 6) |
Regulation 4 then lists the basic facilities that cannot be shared between employees, and this is where cheap fit-outs fail an inspection:
- A single bed of not less than 1.7 m²; where double-decker beds are provided, the space between the two beds must be not less than 0.7 m. Either a single bed or a double-decker bed must be provided — the floor, a mat and a shared platform are all non-compliant.
- A mattress of minimum thickness not less than 4 inches, plus a pillow and a blanket. Per person, not per bed frame.
- A lockable locker of not less than 0.35 m long × 0.35 m wide × 0.9 m high, for the safe keeping of the employee's valuables including his passport, accessible by the employee at any time.
That last item is worth reading twice. The regulation puts the passport in the worker's own lockable, always-accessible storage. Employer retention of migrant workers' passports is one of the International Labour Organization's indicators of forced labour and has been central to import bans imposed on Malaysian exporters in recent years. Regulation 4(1)(c) is, in effect, the domestic-law answer to it — and the locker is a physical, photographable, inspectable object. Provide it, and document that you did.
The RM150 rental cap from 1 March 2026 — and the three conditions attached to it
Section 24G permits an employer to collect a sum for rent or charge in respect of accommodation, subject to conditions prescribed by the Minister, and provides that the sum shall be collected by deduction from the employee's wages. The ceiling was set at RM100 a month by the Maximum Rental or Charges for Accommodation Regulations 2020 [P.U.(A) 249/2020]. The amending regulations gazetted as P.U.(A) 49/2026 — signed on 29 January 2026 and published on 3 February 2026 — raise that ceiling to RM150 a month with effect from 1 March 2026.
| Element | Position from 1 March 2026 |
|---|---|
| Maximum rental or charge per employee | RM150 per month (previously RM100), or the amount agreed in the contract if lower |
| Instrument | P.U.(A) 49/2026, amending P.U.(A) 249/2020 under section 24G of Act 446 |
| Mechanism of collection | Deduction from wages — section 24G(2). Not a cash payment collected at the hostel |
| Employee's written request | Required. A deduction for accommodation is made at the employee's request in writing |
| Director General's prior approval | Required under section 24(4) of the Employment Act 1955 before the deduction may be made |
| Valid Certificate for Accommodation | Required. Charging rent for accommodation that is not certified and does not meet the minimum standards is not a lawful charge |
The obligations nobody staffs: notice, inspection and the person in charge
Three duties in Part IIIA are cheap to comply with, easy to forget, and among the first things an inspector asks for.
Section 24E — notice of occupation. Within thirty days from the date accommodation is occupied by an employee, the employer must inform the Director General of that occupation, in the form and manner determined. Contravention is an offence carrying a fine of up to RM10,000. This is a recurring obligation, not a one-off: every intake of new workers into an existing hostel restarts the clock.
Section 24L — the person in charge. At least one person must be appointed, responsible for the safety and well-being of the employees and the management of the accommodation and amenities. Their statutory duties are specific: ensure employees comply with the employer's disciplinary rules; visit and inspect the accommodation at least twice a month and keep a record of the inspection as determined by the Director General, at the place of employment; and ensure an employee is taken to a clinic or hospital if he complains of his health or appears unwell, keeping a record of complaints. Two inspections a month, recorded, kept at the workplace — a logbook that either exists on the day of the audit or does not.
Section 24J — safety and health duties. Separate accommodation for employees of the opposite gender; preventive measures for employees' safety and well-being; fire safety measures in accordance with the relevant written laws; electrical wiring systems complying with safety requirements; necessary medical assistance; and preventive measures against infectious disease as ordered by the Medical Officer of Health, arranged at the employer's own expense including immunisation. Section 24K adds that the accommodation must be maintained as the Director General directs. These overlap heavily with the occupational safety regime — see our guide to employer duties under OSHA and the OSH coordinator requirement — and the same site visit often produces findings under both.
The penalty map — and why the RM1,000 in the regulations is misleading
Read P.U.(A) 250/2020 quickly and you will see fines of "not exceeding one thousand ringgit or imprisonment for a term not exceeding six months" attached to each substantive regulation, and conclude that a substandard hostel is a RM1,000 problem. Look again at the structure. Each regulation says the employer who contravenes "commits an offence" — full stop, no penalty stated — and then separately provides that the centralized accommodation provider who contravenes commits an offence punishable by RM1,000 or six months. The RM1,000 is the operator's penalty. Where no penalty is expressly provided, section 33 of the Act supplies it: a fine not exceeding RM50,000, and a further fine not exceeding RM1,000 for each day the offence continues.
| Provision | What it requires | Maximum on conviction |
|---|---|---|
| s.24D(1) & (3) | Employer provides accommodation without a Certificate for Accommodation | Fine up to RM50,000 |
| s.24D(1) & (4) | Centralized accommodation provider does the same | Fine up to RM50,000 or imprisonment up to 1 year, or both |
| s.24E(2) | Employer fails to notify occupation within 30 days | Fine up to RM10,000 |
| s.24H(2) | Using a building unfit for human habitation under other written laws | Fine up to RM50,000 |
| P.U.(A) 250/2020 regs 3–6 (employer) | Minimum requirements, non-shareable facilities, floor area, water and electricity | No penalty stated → s.33 general penalty: fine up to RM50,000 plus up to RM1,000 per day of continuance |
| P.U.(A) 250/2020 regs 3–6 (provider) | Same requirements | Fine up to RM1,000 or imprisonment up to 6 months, or both |
| s.28A | Compounding before charge, with the Public Prosecutor's written consent | Up to 50% of the maximum fine |
| s.29A | Offence by a company | Directors, managers, secretaries and those responsible for management may be charged jointly or severally and are deemed guilty unless they prove absence of knowledge, or absence of consent plus all reasonable precautions and due diligence |
Section 29A is the provision to put in front of your board. Liability is not confined to the corporate entity: a director is deemed guilty of the company's offence and carries the burden of proving that he did not know, or that he did not consent or connive and had taken all reasonable precautions and exercised due diligence. For a foreign parent that has appointed a nominee or resident director in Malaysia, that is a live personal exposure sitting on someone who may never have visited the hostel — a risk we cover more generally in our note on resident and nominee director liability. The defence is documentary: appointment letters, the twice-monthly inspection log, photographs of the lockers, the certificate on the wall.
How this connects to your quota, your customers and your renewal
Act 446 is enforced by the Labour Department, but its practical consequences arrive through three other doors.
The foreign worker pipeline. Accommodation certification has become a checkpoint in foreign worker quota and permit processing, and quota applications now run through the FWCMS eQuota module under the Ministry of Human Resources. An employer whose accommodation is uncertified risks a quota approval that stalls at exactly the point where the recruitment costs are already sunk. The sequencing — premises and certificate before quota, quota before recruitment — is set out in our guide to the PLKS foreign worker permit, levy and quota process.
Customer and buyer audits. If you export, your accommodation is audited by people who are not Malaysian regulators. Social-compliance audits for European and American buyers examine the same objects the Act does — floor area per worker, sanitation ratios, passport custody, recruitment fees — and a failed audit removes you from a supplier list faster than any fine. The gazetted Malaysian standards are, conveniently, a defensible floor to build against.
Employment law generally. Wage deductions, working hours, termination and the notice to vacate under section 24M (an employee who resigns or is terminated on four weeks' notice vacates on the effective date; where notice is shorter or termination is immediate, within four weeks) all sit inside the wider Employment Act framework covered in our guide to Employment Act 1955 HR compliance for foreign employers.
Three routes, and how to choose between them
| Route | Who holds the certificate | Best when | Main risk |
|---|---|---|---|
| Build or convert your own quarters on or near the site | You, as employer | Headcount is stable and large; you own the land; the factory is in an industrial zone with worker-housing provision | Capital cost and the local-authority approval chain; you carry every standard yourself |
| Rent apartments, terrace houses or a shoplot upper floor | You, as employer | Headcount is small or seasonal; you need to start quickly | Change-of-use and fitness-for-habitation exposure under s.24H; landlords who will not permit the works needed to pass; the 1:6 sanitation ratio in non-dormitory premises |
| Place workers with a centralized accommodation provider / CLQ operator | The provider, as CAP — but your s.24E notice, s.24L person in charge and s.24J duties remain yours | Multi-site operations, fluctuating headcount, no appetite to run a hostel | Assuming outsourcing transfers the liability. It does not. Verify the provider's certificate is current and covers the block your workers are actually in |
Whichever route you take, the compliance file is the same and it is short: the Certificate for Accommodation; the section 24E occupation notices; the appointment of the person in charge and the twice-monthly inspection log; the written deduction requests and the Director General's approval for the RM150; the fire, electrical and local-authority approvals for the building; and dated photographs of beds, mattresses, lockers and sanitation. Assemble it before an inspector asks, because section 29A means the person who cannot produce it is a named individual, not the company.
What to do next
If you are setting up in Malaysia, decide where your workers will live at the same time as you decide where the plant will sit — not after the permits are approved. If you are already operating, the fastest useful exercise is a two-hour audit: count the sleeping floor area per worker against 3.6 m² or 3 m², count bathrooms against 1:6 or 1:15, open a locker to see whether a passport is inside it, and ask to see the certificate and the inspection log. Whatever that turns up is cheaper to fix now than after a compound offer arrives.
ONEKEY BIZ advises foreign-invested manufacturers, contractors and service operators in Malaysia on the whole employment-compliance chain — accommodation certification under Act 446, foreign worker quota and permits, Employment Act deductions and payroll, and the site approvals that sit underneath all of it. Talk to our team about a compliance review of your existing quarters, or see our corporate and regulatory advisory service if you are still at the planning stage.
Frequently asked questions
Do I need a Certificate for Accommodation if I only house three or four workers?
On the statutory text, yes. Section 24D(1) of Act 446 says no accommodation shall be provided to an employee unless certified with a Certificate for Accommodation, and it attaches no headcount threshold. The widely repeated "five or more workers" figure appears nowhere in Act 446 or in the gazetted regulations — it circulates in vendor guides, not in the law. The only exemption in the statute is for housing in estates and mines within District Council areas, a legacy of the plantation half of the Act. An employer providing uncertified accommodation commits an offence under section 24D(3) carrying a fine of up to RM50,000.
Is the minimum floor area 3.6 m² or 3 m² per worker?
Both, depending on the class of building — and most English summaries state it backwards. Under regulation 5 of P.U.(A) 250/2020, accommodation that is not in dormitory form must provide a bedroom with a floor area of not less than 3.6 m² per employee; accommodation in dormitory form must provide a sleeping area of not less than 3 m² per employee. The bathroom-and-toilet ratio moves the same way: 1 to 6 employees for non-dormitory accommodation, 1 to 15 for dormitories. A rented terrace house or apartment holding a dozen workers is non-dormitory accommodation and must meet 3.6 m² and 1:6.
Can I start deducting RM150 a month from 1 March 2026?
Only if three things are already true. P.U.(A) 49/2026 raised the ceiling from RM100 to RM150 with effect from 1 March 2026, but a ceiling is a maximum, not an entitlement. Section 24G(2) requires the sum to be collected by deduction from wages; the deduction must be made at the employee's request in writing; and section 24(4) of the Employment Act 1955 requires the prior written approval of the Director General of Labour. On top of that, charging rent for accommodation that is not certified and does not meet the minimum standards is not a lawful charge. Employers already deducting RM100 should treat the increase as a fresh variation, not an automatic uplift.
We outsource housing to a CLQ operator. Does that transfer the liability?
Partly, and less than most employers assume. A centralized accommodation provider must hold its own Certificate for Accommodation and faces a fine of up to RM50,000 or one year's imprisonment for operating without one. But the employer's own duties under Part IIIA do not travel with the workers: the section 24E notice of occupation within 30 days remains yours, as does the appointment of a person in charge under section 24L with its twice-monthly recorded inspections, and the safety and health duties in section 24J. Verify that the provider's certificate is current and that it covers the specific block your workers occupy, not another building on the same estate.
Does Act 446 apply in Sabah and Sarawak?
No. Section 1(2) applies the Act to Peninsular Malaysia and the Federal Territory of Labuan only — Labuan having been brought in by the 2019 amendment [Act A1604] with effect from 1 June 2020. Sabah and Sarawak operate under their own labour ordinances, which contain their own accommodation and inspection regimes. An employer running plants on both sides of the South China Sea therefore needs two separate compliance files, and cannot assume that a JTKSM Certificate for Accommodation has any effect in Kota Kinabalu or Kuching.
Related services
We handle the process described in this article end-to-end.
- Legal ConsultationMalaysia commercial law advisory covering corporate, contract and cross-border matters.
- Contract DraftingProfessional drafting of Malaysia-compliant commercial contracts in English & Chinese.
- Sdn. Bhd. IncorporationRegister a private limited company (Sdn. Bhd.) with SSM end-to-end.
Sources & references
- JTKSM — Employees' Housing, Accommodations and Amenities (Act 446)
- Laws of Malaysia — Act 446, Employees' Minimum Standards of Housing, Accommodations and Amenities Act 1990 (reprint)
- P.U. (A) 250/2020 — Accommodation and Centralized Accommodation Regulations 2020
- JTKSM — Frequently asked questions on employees' housing, accommodation and amenities
- Attorney General's Chambers — Federal subsidiary legislation portal (P.U.(A) series)
This article is general information only, not legal, tax or immigration advice. Policies, thresholds and official fees are set by the relevant Malaysian authorities and may change. Talk to our consultants about your specific situation.