Global Compliance Desk – Malaysia

Malaysia Employment Amendment Bill 2021 – Key Amendments to the Employment Act 1955

The Malaysian Senate (Dewan Negara) introduced an Employment Amendment Bill, 2021 (Amendment Act) on March 30, 2022, which shall amend various provisions under the current Employment Act of 1955 (Employment Act). The amendment was expected to come into force on September 1, 2022. But now as per the latest reports from the Ministry of Human Resources, the effective date for the amendment has been postponed and is now expected to come into force on January 1, 2023. Read on as we cover the details of the bill –

Weekly Working Hour Threshold

The current Employment Act states that the weekly working hour in Malaysia is 48 hours per week. 

The Amendment Act modifies the weekly working hour threshold reducing the duration to 45 hours per week. The Amendment shall have no impact on the standard workday, which is 8 hours per day in a 5 days work week. Any hours worked in excess of 45 per week will be considered overtime work and the employee shall be entitled to a premium equal to 1.5 times the hourly rate of pay.

If the employer fails to adhere to the provisions on working hours, specifically the now reduced weekly working hours, they shall be subject to a penalty of up to RM50,000.00.

Flexible Working Arrangements

The Amendment Act introduces the option of Flexible Work Arrangements for employees. Employees can now submit a written request to their employers to change the hours, days, or location of their employment.

The employee shall make an application for a flexible working arrangement in the form and manner as may be determined by the Director General. After receiving the application, the employer shall, within 60 days from the date such application is received, approve or refuse the application. The employer shall inform the employee in writing of the employer’s approval or refusal of the application and in the case of a refusal, the employer shall state the ground of such refusal.

Night Work   

There is no night work requirement for employees. The only requirement given under the employment act is for female employees. Under the Employment Act, female employees are not permitted to work during the night from 7 pm and 5 am.

In accordance with the Amendment Act, female employees shall no longer be prohibited from performing night work as the provision has been repealed from the Employment Act.  

Maternity Leave

The Employment Act states that a female employee shall be entitled to 60 consecutive days of paid maternity leave. 

The Amendment Act amends the duration of paid maternity leave from 60 consecutive days to 98 consecutive days. 

The Amendment also restricts employers from terminating a pregnant employee if they are suffering from an illness arising out of pregnancy except on the grounds of misconduct, willful breach of a condition of the employment contract, or closure of the employer’s business.

Paternity Leave

Newly Introduced Paternity Leave – The Amendment Act introduces paid paternity leave for married male employees.  A married male employee is entitled to a paid paternity leave at the regular rate of pay for a period of 7 consecutive days for each birth but shall be restricted to 5 births irrespective of the number of spouses. 

In order to be eligible to apply for paternity leave, the male employee is required to be employed for at least 12 months immediately before the commencement of leave, with the same employer. The employee is required to notify the employer of the pregnancy of his or their spouse at least 30 days prior to the expected confinement or as early as possible after the birth.

Conclusion

By January 1, 2023, all organizations covered by the Employment Act must make the necessary changes to their policies and procedures.