The upcoming gig workers’ bill is highly anticipated and has the potential to reshape Malaysia’s gig economy for the better – if crafted with precision.
“Precision” here means clearly defining who gig workers are and addressing underlying issues in digital labour, including the potential misclassification of employment status. The regulations must be tailored to account for the variations in work and autonomy levels across different sectors.
A key concern is whether the bill’s enactment could inadvertently incentivise more workers to enter informal or precarious forms of employment, moving away from traditional jobs with stronger labour and social protections.
Malaysia’s gig economy has been expanding rapidly. The number of “own-account workers” – a proxy designation for gig workers – increased from 2.39 million in 2021 to an all-time high of 3.1 million in 2024, representing more than 17% of the workforce.
In 2017 alone, it grew by 31% and continues to outpace formal employment, with 9.7% growth compared to 3.5% for total employment in 2022. With more Malaysians relying on gig work, leaving this workforce unprotected could lead to a rise in the precariat and an increased financial burden on the social security system.
The bill must clearly define gig workers and consider the different natures of digital labour: web-based and location-based work.
Web-based workers typically operate with greater autonomy, while location-based workers – specifically in the ride-hailing and delivery sectors – face significantly more control from platforms, reflecting a stronger employer-employee power dynamic.
Their economic dependency, lack of access to information, and limited negotiation power make them resemble traditional employees rather than “independent contractors.”
For instance, the United Kingdom’s decision to classify Uber drivers as “workers” highlights the need to acknowledge these power dynamics when tailoring regulations. This demonstrates that protections must encompass both social and labour rights.
Malaysia’s bill should similarly recognise these differences and adopt a tailored approach to ensure protections are meaningful and appropriate for both platforms and workers.
The bill must also address the unfair treatment meted out by platforms. Unlike traditional employees, many gig workers lack the right to due process or recourse if they are unfairly suspended or penalised by a platform’s automated systems.
Ride-hailing and delivery platforms often rely on algorithms to monitor, rate, and sometimes suspend workers without transparency or accountability.
To provide meaningful protections, the bill should establish an accessible grievance system, rights to explanation and dispute, and collective bargaining. An ombudsman could help workers contest unjust algorithmic decisions and ensure procedural fairness.
The bill’s success will also hinge on encouraging participation in social protection schemes – an area where Malaysia has faced challenges. Historical data from SOCSO shows alarmingly low participation rates among gig workers, both in voluntary and mandatory contributions.
In 2022, only about 4% of self-employed transportation workers were registered. Factors contributing to this low sign-up rate include a lack of awareness among location-based workers, platforms’ reluctance to collaborate, and limited, unsuitable coverage. Policymakers must tailor protection coverage and mechanisms for deduction to increase participation rates.
Alternatively, mandatory Employee Pension Fund (EPF) contributions from platforms could be considered for location-based workers consistently meeting a weekly minimum threshold of hours. Such measures would secure financial stability and provide a safety net, but the calculations must avoid burdening lower-income workers or passing costs onto consumers.
Collective bargaining, including the right to unionise, should be extended to workers with strong employer-employee relationships. The Trade Unions Act 1959 only covers “employees,” leaving many location-based workers ineligible under either the “independent contractor” or “employee” categories.
Union representation would grant gig workers a collective voice to negotiate fairer terms and advocate for their rights. The right to unionise is not just about improving working conditions but is a fundamental step toward levelling the playing field and empowering gig workers in an industry that increasingly relies on their labour while failing to protect them adequately.
Recognising that not all gig workers are the same and implementing sector-specific protections will ensure the bill’s effectiveness without burdening platforms with compliance costs or impeding workers who prioritise autonomy.
If designed correctly, the bill could serve as a model for balancing innovation and labour rights, demonstrating that it is possible to support a flexible workforce without compromising fair treatment and social security.
Farah Nabilah Abdul Rahman
Analyst, Institute of Strategic & International Studies (ISIS) Malaysia
