AKTA 446: New Accommodation Charge and Employer Compliance

Malaysia's Employees' Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446) regulates employee accommodation, including minimum standards, certification and related employer obligations. It applies in Peninsular Malaysia and the Federal Territory of Labuan.

A key 2026 change is the increase in the maximum accommodation charge from RM100 to RM150 per worker per month, effective 1 March 2026.

Employers should not automatically increase existing accommodation deductions to RM150. Before implementation, HR and Payroll should confirm that:

Importantly, an accommodation deduction cannot be made where the accommodation does not have a valid Certificate for Accommodation. This also applies to workers placed in centralised accommodation managed by an external provider.

The new RM150 ceiling does not automatically override existing employment terms.

For example, where an employment contract specifies RM100 per month, the employer should not increase the deduction to RM150 without first obtaining the worker's written agreement to amend the relevant terms.

Similarly, if the contract provides for free accommodation, a charge should not be introduced without first varying the contractual arrangement with the employee's written agreement.

Where the contract is silent or unclear, employers should review the terms and applicable wagededuction requirements before making any deduction.

Employers should also avoid treating RM150 as a basic rental charge and adding separate deductions for facilities provided as part of the accommodation.

Required accommodation facilities are generally the employer's responsibility and should not be separately charged to workers. Multiple payroll deductions that effectively push the accommodation cost beyond the permitted amount may create compliance risk.

For centralised accommodation, the provider's commercial invoice and the amount legally deductible from employees should also be treated separately. Employers should not simply pass the provider's cost directly to workers.

Management should maintain a central accommodation register covering:

Employers should also ensure that required notifications on the placement of workers are made within the prescribed timeframe. Failure to comply with accommodation certification or reporting requirements may expose the company to enforcement action and financial penalties.

Management should initiate a focused HR–Payroll–Facilities review before applying the new rate.

Payroll records should clearly identify accommodation deductions, while supporting documents— including contracts, written amendments, certificates and occupancy records—should be retained for audit and inspection.

The increase to RM150 effective 1 March 2026 gives employers a higher permissible ceiling for accommodation charges, but it does not provide blanket authority to deduct RM150 from every worker.

The practical compliance test requires Management to consider and confirm the following:

Key Takeaway: Management should therefore treat the 2026 change as a trigger to review existing accommodation and payroll arrangements rather than simply changing the deduction amount.