How to Redirect Salary When Frozen

Your salary does not stop when your account is frozen

A frozen bank account does not change your employer’s duty to pay you. Your company may run payroll as usual, and your salary may still go into the frozen account. You just cannot take it out. The money stays there, and you can use it if the freeze is lifted.

The problem is that you need money now for rent, food, transport and bills. One way is to get your salary paid into an account you can use. To understand why salary accounts get frozen, read our guide on frozen salary accounts.

Step 1: Use an account that is not frozen

The freeze covers a specific account, not you as a customer. If you already have another account in your own name at a different bank, use that one.

If you have no other account, ask your lawyer before you open a new one. If the investigation is wide, a new bank may ask about the frozen account. Never ask a friend or relative to receive your salary.

Keep the account simple. Use it only for your own salary and essential bills, and do not use it to move money out of the frozen account.

Step 2: Write to your employer

Write to your HR department asking them to change the account your salary is paid into. Keep the letter short and specific. Include your name, employee number, the new bank name, the account number and the date you want the change to start.

You do not need to explain the freeze. Saying you have changed your main bank account is enough.

Your employer does not have to agree to pay your salary elsewhere. ^[f2] Some employers will help with a clear written request. If your company uses one payroll bank, check whether it can pay into an account at another bank, because some companies only pay into their chosen bank.

Step 3: If you cannot move your salary

If you have no other account, or your employer cannot pay you elsewhere, there is a legal option. If an enforcement agency froze the account under AMLA Section 44, you can apply in writing to that agency under Section 44A to vary the freeze order. ^[f1]

A variation application asks the agency to release part of the frozen money for essential living costs. Your lawyer prepares it with supporting documents: your employment letter, payslips, tenancy agreement, utility bills and a list of monthly expenses.

The senior officer who decides can allow genuine living costs. The decision may set a monthly amount the bank releases to you, or release your salary payments while keeping other money frozen.

What happens to salary already in the frozen account

Salary paid into the account during the freeze stays there while the freeze lasts. If the freeze is lifted, you can use the full balance, including the salary paid in during the freeze.

Under AMLA Section 52A, a freeze order lapses if no one is charged within 18 months. ^[f4] When that happens, the order no longer applies to the account.

If your employer has kept paying salary into the account for several months, that money stays in the account and is available again if the freeze is lifted.

EPF, SOCSO and tax are not affected

Your EPF contributions carry on whichever account receives your salary. ^[f3] Your employer pays both your share and its share straight to KWSP. Changing your salary account does not change your EPF deductions.

SOCSO is not affected either, because your employer deducts and pays it before your salary goes out. Monthly tax deductions (PCB) also continue as normal from your gross pay.

If your salary goes to a new account, keep your EA form and payslips. They show that all the required deductions were made correctly during the freeze.

Should you tell your employer about the freeze?

You do not have to tell your employer. It is your choice. Some people explain the situation to keep their employer’s trust, while others keep it private and just ask for the account change.

If you do explain, keep it short. You can say your bank has restricted the account and you are dealing with it. Do not say anything untrue.

Whether an employer can dismiss someone over a frozen account depends on the facts. Just cause is decided case by case, and conduct outside work can sometimes matter. If your employer’s attitude changes after hearing about it, ask your lawyer about your rights during investigation.

When a variation is the better route

Sometimes moving your salary is not possible, or the freeze covers all your accounts. Then a written application to the agency under AMLA Section 44A is the direct answer. ^[f1]

A lawyer who handles frozen account matters can prepare the application. If you urgently need money to live on, say so clearly. The senior officer weighs your needs against the purpose of the freeze and may allow reasonable amounts for essentials.

A variation is a decision by the agency that your bank must follow. Once it is granted, the bank releases money on the agency’s terms. When you cannot move your salary, this is the route to ask about.

Sources

1. Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA), Section 44A
2. AMLA Section 52A, 18-month freeze limit
3. Employment Act 1955, employer obligations
4. Employees Provident Fund Act 1991, EPF contribution requirements