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<\/figure>An employee works 3 hours OT on Monday, 4 on Wednesday, 5 on Saturday. That is 12 hours in one week. Over four weeks, that is 48 hours. Add a public holiday shift, a rest day callout, and two weekend projects, and the employee is at 90 hours by the third week. The supervisor approves each OT request individually because each one looks reasonable. The attendance system processes each day’s OT independently. By month-end, the total exceeds 104, and nobody noticed.<\/p>\n<\/div><\/div>\n\n\n\n
The problem is structural. Most attendance systems calculate OT per day. They apply the correct rate: 1.5x for a normal workday, 2.0x for a rest day, 3.0x for a public holiday. They calculate the amount and feed it to payroll. What they do not do is maintain a running cumulative total per employee per month and flag when that total approaches or exceeds 104 hours.<\/p>\n\n\n\n
Daily OT calculation and monthly cap tracking are two different functions. Most systems do the first. Almost none do the second automatically.<\/p>\n\n\n\n
The Industries Where This Breaks Most Often<\/h2>\n\n\n\n
The 104-hour cap is not a distant ceiling for every company. In some industries, it is a constraint that gets tested every month.<\/p>\n\n\n\n These are industries where OT is structural, not occasional. Employees in these sectors regularly work OT every week. The 104-hour cap is not theoretical. It is a real limit that gets crossed in peak months by employees whose supervisors approved every individual request without seeing the cumulative total.<\/p>\n\n\n\n When the Department of Labour audits a company, OT compliance is one of the standard checks. The auditor pulls attendance records and calculates the total OT hours for each employee per month. If any employee exceeds 104 hours in any month without the Director General’s approval, the employer is in breach.<\/p>\n\n\n\n The auditor does not care that the OT was voluntary. They do not care that the employee requested it. They do not care that every hour was paid correctly at the correct rate. The question is binary: did the total exceed 104 or not.<\/p>\n\n\n\n The penalty under the Employment Act is a fine of up to RM50,000 per offence. And each employee who exceeds the cap constitutes a separate offence. A company with 20 workers who exceeded the cap in a single peak month could be facing up to 20 separate penalties.<\/p>\n\n\n\n The 104-hour monthly cap is not the only limit. The Employment Act also restricts total working hours, including overtime, to no more than 12 hours in a single day and 72 hours in a single week. Each of these limits operates independently, and breaching any one of them is a separate offence.<\/p>\n\n\n\n Beyond the fine, there is a secondary risk. If an employee who regularly worked over 104 hours files a claim for workplace injury, burnout, or unfair treatment, the employer’s own attendance records become evidence that the company allowed excessive working hours in violation of the statutory limit. The records that were supposed to protect the company now work against it.<\/p>\n\n\n\n![\"\"](\"https:\/\/www.timeteccloud.com\/blog\/wp-content\/uploads\/2026\/05\/magnific_can-you-do-icon-of-manufa_2964507693-1-1024x218.png\"){kind=icon}
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What Happens During a Labour Audit<\/h2>\n\n\n\n
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