Employment Act Malaysia: Amendment in 2022

The Employment Act (Amendment) 2022 came into effect on 1 January 2023. This Amendment Act seeks to introduce a number of important changes to the previous act – Employment Act 1955 (EA 1955) – and is aimed at benefiting both employees and employers in Malaysia. This article seeks to highlight some of the key changes brought about by the amendment that Malaysian employers and employees should be aware of.

Calculation of wages for incomplete month’s work

The Amendment Act provides a method to calculate the wage for Malaysia workers who have not completed a whole month of service.

Working Hours and Flexible Work Arrangements

• The maximum working hours for employees in Malaysia has been reduced from 48 hours to 45 hours.>
• Employees can apply for flexible working arrangements, depending on the suitability of the working hours with regards to the workplace. However, the employer is not legally obligated to grant this request. If they reject the request, they must to provide the grounds for refusal within 60 days of the application.

Maternity Leave

• The amended Act increased the length of paid maternity leave from 60 to 98 days.
• Maternity leave shall be restricted to the five (5) or more surviving children.
• The Act introduces a new section that prohibits an employer from terminating an employee who is pregnant or is suffering from an illness arising out of her pregnancy, except under specific circumstances such as willful breach of contract, misconduct or closure of the employer’s business. The onus is on employers to prove that a termination is not due to pregnancy.

Paternity Leave

• A married male employee shall be entitled to a paid paternity leave for a period of 7 days for each child.
• Paternity leave shall be restricted to five (5) confinements, irrespective of the number of spouses.

Sexual Harassment Notice

• Malaysian employers are obligated to prominently display a notice to raise awareness of sexual harassment in the workplace.

Employment of foreign employees

• Approval to employ a foreign employee must be obtained from the Director-General of Labour.
• Upon the employer satisfying the conditions listed in the Act, approvals will be granted. Failure to obtain an approval is an offense, and on conviction, the employer shall be liable to a fine not exceeding RM 100,000 and/or to imprisonment for a term not exceeding five years.

The full list of Malaysia’s Employment Act provisions which will not apply to employees earning more than RM4,000/month:

• Subsection 60 (3): Overtime for work on rest days.
• Subsection 60A (3): Overtime for work outside of normal working hours.
• Subsection 60C (2A): Shift work allowance.
• Subsection 60D (3): Overtime and allowance for work on public holidays.
• Subsection 60D (4): Overtime for work on holidays on half working days.
• Subsection 60J: Termination, lay-off, and retirement benefits.

The COVID-19 crisis has had a significant impact on the world’s labour market and job landscape. The aim of the Employment Act (Amendment) 2022 is to increase and improve the protection and welfare of employees and also ensure that labour law provisions are in accordance with international labour standards.

Lim Hoey Ling
Director
Business Process Outsourcing
ECOVIS MALAYSIA BPO SDN BHD
Email: hoeyling.lim@ecovis.com.my