KUALA LUMPUR (May 8): Malaysia’s Gig Workers Act 2025, gazetted in December last year, aims to end an era unregulated platform work. But the legislation is being treated as a ceiling of compliance by some platforms, not as minimum standard.

Joshua Tan Soo Tjan, chief executive and co-founder of TROOPERS Innovation Sdn Bhd, a job-matching platform specialising in flexible frontline talent, is among those arguing that statutory compliance alone is insufficient to stabilise the gig workforce.

The act mandates social security coverage under the Self-Employment Social Security Scheme (SPS Lindung) and stricter standards on dispute resolution, payment transparency and occupational safety, but Tan said private coverage of the kind available to salaried employees remains largely out of reach for gig workers.

That gap prompted TROOPERS to launch TROOPERKS, a welfare initiative that went live concurrently with the act’s enforcement. Its centrepiece is a cancellation compensation scheme where if a confirmed shift is cancelled by a hiring manager within 24 hours of the start time, the worker receives half their expected earnings, a protection which the act does not require at this point.

“The expected earnings [are disbursed] immediately, without requiring any dispute process or tribunal and TROOPERS absorb this cost directly. As the community has long said, ‘No jobs, salary must [still] be paid’. TROOPERS has built this principle into the platform,” said Tan.

This threshold was chosen as it represents the point at which a worker can no longer reasonably replace lost income by accepting an alternative assignment on the same day.

The initiative also safeguards talents who are put in dangerous or unsafe environments when hired through the platform. Tan said sometimes, when talents are unaware of the safety implications of a job and if they decline a job at the last minute for this reason, they will be given their full payment, while the client will be investigated by TROOPERS.

“We make it very clear with our partners and clients that the work that they do must be in a safe environment. If they are working with machinery, they need things like protective gloves or other gear. The safety of talent is important to us, and they should not lose out on their income just because they feel unsafe.”

To fund these benefits, which also include a private personal accident policy through VSure Tech and tele-healthcare via HeyDoc Health Sdn Bhd, TROOPERS is implementing a 2% platform fee, effective May 1, 2026.

Under the act, platforms are restricted in how they can deduct earnings from a worker’s payout. To remain compliant, TROOPERS has structured the 2% fee not as a deduction from the worker’s agreed wage, but as a "pre-income service charge.”

On the worker's side, the fee is applied as a pre-income charge against the base shift rate only, before the payout is processed. For example, if the agreed shift rate is RM100, the worker receives RM98. The 2% (RM2) is applied before income is recognised and released.

The legal significance of "pre-income" under the act is to protect a worker’s additional earned wages. A conventional post-income deduction would capture a worker's total earnings, including overtime, tips and performance incentives.

“By structuring the fee as a pre-income charge against the base rate only, TROOPERS ensures that anything a worker earns beyond their base shift is never subject to the fee. Workers keep 100% of all additional earnings,” Tan explained.

"The worker sees a transparent rate and they receive that full amount.”

However, this raises the question of price elasticity. In a competitive market for manpower, can platforms afford to add a 2% surcharge without driving clients toward cheaper, less compliant alternatives?

Tan believes the market is maturing, noting that clients want to engage compliant platforms that are increasingly protected from regulatory and reputational exposure. On top of that, the incorporation of these protections into TROOPERS’ business model act as a tool for talent retention and market differentiation.

“The conversation in the market has shifted. Hiring managers are asking not just about cost, but about compliance posture. We believe the 2% fee is competitively absorbed within that context and positions TROOPERS as the responsible choice for enterprise clients operating under the new act,” he added.

“Our working hypothesis — supported by platform economics literature — is that structured welfare benefits reduce the cost of talent acquisition and retention over time. Gig platforms that offer meaningful protection attract and retain higher-quality, more committed workers, which translates into better service delivery for clients and lower recruitment overhead for the platform,” he elaborated.

The inclusion of tele-healthcare in the TROOPERKS bundle highlights a specific gap in Malaysia’s social safety net. While the public healthcare system is accessible, the opportunity cost for a gig worker to spend half a day in a government clinic queue is prohibitive.

Through a partnership with HeyDoc Health Sdn Bhd, TROOPERS is providing 24/7 teleconsultations and a RM50 monthly subsidy for medicine delivery. While RM50 is a modest sum in the context of private healthcare, Tan argued it acts as a triage mechanism.

"For a gig worker, a minor illness often goes untreated because they can't afford the time for the clinic fee. Tele-health removes that first barrier," Tan said.

Similarly, the VSure Tech personal accident insurance is designed to complement, rather than compete with, the statutory SPS Lindung. In the event of an accident, the private policy can address benefit gaps or provide quicker payouts for immediate expenses.

One of the persistent legal challenges for the gig economy globally is the risk of reclassification. In jurisdictions like California and the UK, the more benefits a platform provides, the higher the risk that a court will deem the workers as employees.

This would trigger massive back-payments for the Employees Provident Fund (EPF), annual leave and termination benefits, a scenario that could bankrupt many platform models.

In Malaysia, the act aims to provide a safe harbour for platforms. By creating a specific legal category for gig workers, the act allows platforms to provide benefits like those in the TROOPERKS programme without automatically triggering an employer-employee relationship.

Tan explained that key factors that courts and regulators typically consider in reclassification risk — exclusivity, control over working hours, integration into business operations and the right of substitution — are not materially altered by the provision of welfare benefits per se.

Hence, a worker who retains full flexibility to accept or decline shifts, work across multiple platforms and operate independently does not become a de facto employee simply because their platform provides accident insurance or healthcare access.

“We have engaged legal counsel in the structuring of TROOPERKS and will continue to monitor evolving case law and regulatory guidance. Should the legal landscape shift in ways that create reclassification risk, we will engage proactively — including through our position on the National Gig Advisory Council (MPGig) – to ensure that the policy framework keeps pace with the operational realities of platform work,” he said.

Tan was recently appointed one of the 26 members of MPGig, giving the platform a direct line to the ministry in shaping future interpretations of the act. A legitimate concern is ensuring its advocacy does not inadvertently create a regulatory environment that favours larger platforms while pricing out smaller, local competitors.

“TROOPERS' position within that council will be guided by the principle that a healthy gig economy requires a competitive, diverse platform ecosystem — including smaller, local operators,” said Tan.

“Regulatory frameworks that impose disproportionate compliance costs on smaller platforms would ultimately reduce competition, concentrate market power and harm workers through reduced choice. That outcome is not in TROOPERS' interest either.”

Tan added that he would actively advocate for phased implementation timelines, tiered compliance frameworks based on platform size and shared infrastructure solutions that allow smaller players to meet welfare standards without being priced out.

“The goal is to raise the floor for all workers — not raise barriers for smaller platforms.”