During Labour Day 2026, the government introduced a series of measures aimed at strengthening Malaysia’s labour market, supporting workers, and improving long-term workforce resilience.
The announcements were made at the national-level celebration by Prime Minister Anwar Ibrahim, who outlined a broader strategy focused on skills, protection, and employability.
The initiatives form part of a wider effort to ensure workers remain competitive, especially as industries continue to evolve due to rapid technological change and shifting economic conditions.
RM710 Million PACE Package to Strengthen Workforce Resilience
At the centre of the announcements is the Progressive Acceleration for Capability and Employment (PACE) (Pakej Daya Tahan Ekonomi), valued at more than RM710 million. The programme will be implemented through the Human Resources Ministry as part of the Economic Resilience Package 2026.
According to the Prime Minister, the initiative is designed to ensure workers remain competitive while also providing retraining opportunities for those at risk of job loss. He noted that Malaysia’s labour market remains stable, with an unemployment rate of 2.9 per cent, the lowest level in over a decade, but emphasised the need to remain proactive.
PACE is positioned as a long-term response to changing workforce demands. It focuses on strengthening both worker protection and skills development, ensuring that employees are better prepared to adapt to new roles and industry requirements.
Four Key Components Under PACE 2026
The programme will be implemented through four main components, each targeting a specific area of the labour ecosystem.
The first component focuses on social protection readiness, particularly through strengthening the Employment Insurance System (EIS). This includes support for workers who lose their jobs, alongside measures to improve their employability. The government has allocated more than RM580 million under PERKESO’s EIS fund to support this effort.
The second component centres on training and job placement, with a focus on youth and vulnerable groups. Around RM100 million has been allocated under HRD Corp’s HRD Yakin Madani programme, supported by MyFutureJobs to improve job matching and placement outcomes.
The third component addresses the needs of gig workers, reflecting the growing number of Malaysians in flexible work arrangements. A total of RM20 million will be channelled through the Skills Development Fund Corporation (PTPK) to support training and improve social protection for e-hailing and p-hailing workers.
The fourth component focuses on young talent development and SME resilience. Through TalentCorp, the government will introduce an Industry Internship Matching Grant, supported by an allocation of RM10 million, to help SMEs and start-ups hire and train industrial trainees.
Together, these components highlight a more structured approach to workforce development, covering both employment support and future skills readiness.
Post-Maternity Leave Allowance to Support Working Mothers
In addition to PACE, the government also introduced the Post-Maternity Leave Allowance (EPCB) (Elaun Pasca Cuti Bersalin).
This initiative provides financial assistance for women who take up to 30 additional days of leave after completing their standard 98-day maternity leave period. It is expected to benefit more than 132,000 female workers.
The measure is aimed at easing the transition back to work after childbirth, while also supporting continued workforce participation among women.
Proposed Expansion of PERKESO Coverage Overseas
The government also announced plans to expand coverage by the Social Security Organisation (PERKESO) to Malaysians working abroad.
The proposal is expected to benefit more than 480,000 workers, particularly those involved in cross-border employment such as between Malaysia and Singapore. To support this expansion, the government plans to strengthen the legal framework, including amendments to the Self-Employment Social Security Act 2017.
The move is intended to ensure that workers continue to receive social protection regardless of where they are employed.
Labour Day 2026: A Shift Towards Long-Term Worker Security
The measures announced during Labour Day 2026 reflect a coordinated approach to strengthening labour market resilience, improving skills development, and expanding worker protection.
While the labour market remains stable, the introduction of PACE and related initiatives signals a focus on long-term preparedness, ensuring that both workers and businesses are better equipped to navigate future challenges.
Source: here
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