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Employee Leasing Agreement Template for Malaysia

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Employee Leasing Agreement

"I need an Employee Leasing Agreement for my IT consulting company in Kuala Lumpur to lease software developers and project managers from a staffing agency, with particular emphasis on intellectual property protection and data security compliance, starting from March 2025."

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What is a Employee Leasing Agreement?

The Employee Leasing Agreement is essential for businesses operating in Malaysia that seek flexible workforce solutions while ensuring compliance with local employment laws. This document is typically used when a company wishes to engage workers through a professional employer organization (PEO) or staffing agency, rather than hiring directly. The agreement comprehensively addresses the triangular relationship between the leasing provider, client company, and leased employees, detailing responsibilities for statutory contributions, workplace safety, insurance, and other compliance requirements under Malaysian law. It's particularly valuable for companies expanding into Malaysia, managing temporary workforce needs, or seeking to outsource employment administration while maintaining operational control of workers.

What sections should be included in a Employee Leasing Agreement?

1. Parties: Identifies and provides full details of the leasing company (provider) and the client company

2. Background: Explains the context of the agreement, including the provider's business of providing temporary workforce and the client's need for workers

3. Definitions: Defines key terms used throughout the agreement, including 'Leased Employees', 'Services', 'Charges', etc.

4. Scope of Services: Details the employee leasing services to be provided, including recruitment, payroll management, and HR administration

5. Term and Termination: Specifies the duration of the agreement and conditions for termination

6. Provider Responsibilities: Outlines the leasing company's obligations including employment contracts, payroll, statutory contributions, and insurance

7. Client Responsibilities: Defines client's obligations including workplace safety, day-to-day supervision, and operational direction of leased employees

8. Fees and Payment Terms: Details the fee structure, payment schedule, and related financial terms

9. Employment Terms: Specifies the general terms of employment applicable to leased employees

10. Statutory Compliance: Addresses compliance with Malaysian employment laws, social security, and other relevant regulations

11. Confidentiality: Protects confidential information shared between parties during the course of the agreement

12. Indemnification: Sets out mutual indemnification obligations and liability limitations

13. Dispute Resolution: Establishes procedures for resolving disputes between parties

14. General Provisions: Contains standard boilerplate clauses including notices, amendments, governing law, etc.

What sections are optional to include in a Employee Leasing Agreement?

1. Insurance Requirements: Detailed insurance obligations when specific coverage types are needed beyond statutory requirements

2. Intellectual Property Rights: Required when leased employees may create or handle intellectual property

3. Non-Competition: Include when there's a need to restrict the provider from providing similar services to competitors

4. Data Protection: Detailed section needed when significant personal data processing is involved

5. Training and Development: Include when specific training requirements or professional development programs are part of the agreement

6. Performance Standards: When specific KPIs or performance metrics need to be maintained

7. Transition Services: Required when providing for potential transfer of employees to the client

8. Force Majeure: Detailed provisions for handling unforeseen circumstances affecting service delivery

What schedules should be included in a Employee Leasing Agreement?

1. Schedule 1 - Service Specifications: Detailed description of services, including specific roles and responsibilities

2. Schedule 2 - Fee Schedule: Detailed breakdown of fees, charges, and payment terms

3. Schedule 3 - Employee Categories and Qualifications: Lists different categories of employees and their required qualifications

4. Schedule 4 - Service Level Agreement: Specific performance metrics and service standards

5. Schedule 5 - Statutory Benefits Summary: Summary of statutory benefits and which party is responsible for each

6. Appendix A - Required Forms and Documentation: Templates for necessary forms and reporting documents

7. Appendix B - Health and Safety Requirements: Specific workplace safety requirements and procedures

8. Appendix C - Employee Handbook Reference: Reference to applicable policies and procedures for leased employees

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions




















































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Relevant Industries

Manufacturing

Construction

Information Technology

Healthcare

Hospitality

Retail

Logistics and Supply Chain

Oil and Gas

Engineering Services

Business Process Outsourcing

Agriculture

Mining

Financial Services

Telecommunications

Relevant Teams

Human Resources

Legal

Procurement

Operations

Finance

Compliance

Risk Management

Business Development

Project Management

Executive Leadership

Relevant Roles

Human Resources Director

Legal Counsel

Procurement Manager

Operations Director

Finance Director

Compliance Officer

HR Manager

Contract Administrator

Risk Manager

Business Development Manager

Project Manager

Chief Financial Officer

General Manager

Managing Director

Chief Operating Officer

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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