10 Employment Act 1955 Amendment in Malaysia Including Paternity Leave

The Employment Act in Malaysia has recently undergone several revisions that will substantially impact both businesses and employees. Employers in Malaysia went into panic mode when they learned that the Employment Act (EA) amendments would go into effect on September 1, 2022. Most believed there needed more time to ensure compliance with the relevant laws. The government then moved the Employment Act amendments' implementation date to January 1, 2023. As 2022 draws close, employers should be prepared to adhere to the changes and review the employment contracts. This article will review the ten changes to the Employment Act 1955 Amendments, including the specifics of the new paternity leave provision, and look at how they will affect the workforce in Malaysia. 

Maternity Leave Malaysia Labor Law​

The Employment Act has expanded the 60-day maternity leave entitlement to 98 days. This positive reform will bring the country to comply with international labor standards and ensure that working moms have enough time to rest and care for their children. 

The new measures include extending maternity protection for female employees and increasing the length of maternity leave. It consists of the right to be restored in their post or a comparable one upon their return to work and protection from termination throughout their maternity leave.

Working Hours in Malaysia

The Employment Act stipulates that workers' weekly maximum working hours be decreased from 48 to 45. As a result, workers are now eligible for overtime pay for additional hours worked over the required 45.

The Malaysian working hours laws are intended to safeguard employees' health and safety while enabling them to maintain a fair work-life balance. Employers and workers are advised to become familiar with the applicable requirements to ensure the law is compliant. 

Employment Act Expanded to Cover More Workers in Malaysia

It now applies to all employees regardless of wage, representing the most significant change to the employment landscape in Malaysia as a result of the Employment (Amendment of First Schedule) Order 2022. It is because the First Schedule has been expanded to include any person who has entered into a contract of service. Despite this, workers making more than RM4,000 monthly are exempt from some overtime pay and termination compensation regulations. 

In the past, Employment Act only protected workers making up to RM2,000 per month. Employers should ensure that the employment contracts adhere to the minimal criteria established under the EA due to its expanding reach. Any terms of employment that are less advantageous to the employee may be deemed invalid and unenforceable.

Paternity Leave in Malaysia Increased to Seven Days

The Malaysian government has increased paternity leave to seven days, allowing fathers to take time off work following the birth of their child and support their families. 

This increase in paternity leave is part of a broader effort to support working parents in Malaysia and promote gender equality in the workplace. The government has recognized the vital role of fathers in raising children and supporting their families and has taken steps to ensure that they have the necessary time off.

Hospitalization and paid sick leave

Under the law, employees in Malaysia are entitled to hospitalization leave of up to 60 days per year for each qualifying hospitalization. This leave is available to employees who have worked for their employer for at least three months and have a medical certificate confirming the need for hospitalization.

According to the new amendment, the 14 to 21 days of paid sick leave already provided when hospitalization is not required are now in addition to the 60 days of paid sick leave for hospitalizations. 

Forced Labor Prohibition and Its Impact on Malaysia

Forced labor prohibition significantly impacts both employees and employers in Malaysia. Employees are protected from exploitation and abuse, and fair and ethical employment practices are ensured. Employers must comply with the law and face severe penalties for engaging in forced labor.

Employers who threaten, lie, or compel an employee to perform any task or prevent that person from leaving a workplace after work is completed are subject to a fine not to exceed RM100,000, a term of imprisonment not to exceed two years or both.

Sexual Harassment in Workplace in Malaysia

One of Malaysia's employers' obligations is to put up a notice on sexual harassment in the workplace. This notice informs employees about the types of behavior that constitute sexual harassment, how to report incidents of harassment, and the consequences for those who engage in harassment.

Employees in Malaysia have the right to work in an environment free from sexual harassment. They are encouraged to report any incidents of harassment to their employer or the relevant authorities and to seek support if they have experienced harassment.

Employment Discrimination in Malaysia to Investigate by General Director

A disagreement or matter involving discrimination in the workplace may be investigated and decided by the Director-General of Labour. Discrimination in employment is a serious issue that can affect employees in Malaysia. The government has taken steps to prevent discrimination and promote fair and equal employment opportunities for all individuals.

The measures in place to prevent discrimination include prohibitions on discrimination based on race, gender, religion, and other protected characteristics. Employers must provide equal opportunities for employment, promotion, and training and ensure that all employees are treated with respect and fairness. 

Hiring Foreign Workers in Malaysia

Before hiring foreign workers, employers must receive approval from the Director-General of Labour. As needed, such applications may be accepted with conditions by the Director-General. 

The employer must notify the Director-General of Labour within 30 days if they have terminated a foreign worker. The employer must also inform the Director General within 14 days if the foreign worker absconds from their employment. Employers must provide reasonable notice to the worker and comply with contractual obligations. 

Employers who fail to comply with the regulations for hiring and firing foreign workers in Malaysia may face penalties and legal consequences. It is crucial for employers to understand their legal obligations and to seek advice and guidance when necessary. 

Flexible Work Arrangements

Employees may now apply in writing for flexible working arrangements under the Employment Act to change their hours, days, or place of employment. The employer must approve or reject any application in writing within 60 days and provide a reason for the decision. 

In addition to the framework's uncertainty, only some jobs qualify for flexible working arrangements, and some require physical presence. Naturally, businesses should develop and implement a flexible working policy because it will increase the marketability and competitiveness of such positions. 

The Employment Act in Malaysia has undergone significant changes in recent years to promote fair and equal employment opportunities for all individuals. These changes include expanded worker coverage, paternity leave, hospitalization and sick leave, and prohibitions on forced labor and employment discrimination. 

Employers must also navigate various requirements and regulations regarding hiring and firing foreign workers and implementing flexible work arrangements. However, with careful planning and adherence to legal and practical considerations, employers and employees can create a flexible and sustainable work environment that benefits everyone involved. 

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