The Malaysian government announced that the Employment (Amendment) Act 2022 (the Amendment Act) will come into effect on 1 January 2023 (updated). This Amendment Act seeks to introduce a number of important changes to the principal Act – Employment Act 1955 (EA 1955). The amendment 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 employers and employees should be aware of. Find out below what has been updated from the Employment Act 1955.
Note: The Amendment Act only seeks to amend the existing 1955 Act. There is no new Act, ie, Employment Act 2022.
Calculation of wages for incomplete month’s work
The Amendment Act provided a method to calculate the monthly wages for workers who have not completed a whole month of service.
Related read: Guide to Payroll in Malaysia
Amendment of working hours and flexible work arrangements in the Employment Amendment Act 2022
The Amendment Act has reduced the number of maximum working hours from 48 hours to 45 hours.
On top of that, the Act also provides that an employee may apply to an employer for a flexible working arrangement to vary the hours of work, days of work, or place of work in relation to his employment.
Pregnancy and maternity, and maternity protection
The amended EA 1955 effective 1 September will have the following provisions.
- Paid maternity leave has been extended from 60 days to 98 days
- A new section was introduced to protect the female employee who or is suffering from an illness arising out of her pregnancy – it is an offence for an employer to terminate her services or give her notice of termination of service, except on the grounds of—
(a) wilful breach of a condition of the contract of service;
(b) misconduct; or
(c) closure of the employer’s business.
A married male employee shall be entitled to a paid paternity leave for a period of 7 days for each confinement, capped at 5 confinements irrespective of the number of spouses.
Employment of foreign employee
The employment of a foreign employee is subject to prior approval from the Director General, failure of which results in a fine not exceeding RM 100,000 or imprisonment for a term not exceeding 5 years or both.
Current Act: the employers are only required to submit the particulars of the foreign employee within 14 days of his/her employment to the Director General.
Termination of a foreign employee
A new section was introduced under the Amendment Act which provides that if the service of a foreign employee is terminated as per the new Section 60A EA 1955, the employer shall, within 30 days, inform the Director General of the termination.
In an instance where the foreign employee absconds from the place of employment or terminated his service, the employer shall inform the Director General within 14 days.
Discrimination in employment
The Director General may inquire into and decide any dispute between an employee and his employer in respect of any matter relating to discrimination in employment and the Director General may, pursuant to such decision, make an order.
Sexual harassment in the workplace
Employers who fail to investigate sexual harassment complaints are subject to increased fines from RM10,000 to RM50,000. In addition, employers are now required to display a notice to raise awareness regarding sexual harassment in a visible location at the workplace. However, the language to be used for this notice has yet to be standardised.
It is an offence for an employer to threaten, deceive or force an employee to do any activity, service or work and prevent that employee from proceeding beyond the place or area where such activity, service or work is done. If convicted, the employer shall be liable to a fine not exceeding RM100,000 or imprisonment for a term not exceeding 2 years or both.
Having said that, it is important for both employers and employees to be familiar with these changes so as to ensure compliance with the law and avoid any legal disputes.
Stay compliant with us today!
Let us walk you through his amendments to the Employment Act so that you can stay compliant.