Minister of Human Resources, V. Sivakumar has confirmed that the Malaysia Employment (Amendment) Act 2022 will come into effect on the 1st of January 2023. Thus, employers and HR managers need to take note of the amendments that will affect the company’s operation and workforce planning. In this article, we have summarized some of the amendments related to time and attendance and employee leave management.
Let’s explore the important changes under the Employment (Amendment) Act, 2022.
1. The scope of “employee.”
Pre-amendment, the Act only applied to two kinds of employees:
Regardless of occupation, those making less than RM2,000 per month
Regardless of pay, workers that performed certain vocations, including manual labor, those who supervised manual laborers, and those who drove mechanically propelled vehicles.
After the Employment (Amendment) Act 2022, the provisions of the Act will be applicable to anybody who has signed an employment or contract of service. There is a caveat to this, however, those earning above RM4,000 per month exempted from certain provisions in the Act, including:
Section 60(3) - Overtime rates for employees working on rest days
Section 60A(3) - Overtime rates outside working hours
Section 60C(2A) - Allowance for shift-based work
Section 60D(3) - Overtime on public holidays
Section 60D(4) - Overtime for half working days on holidays
Section 60J - Termination, lay-off, retirement benefits
This finally means that employees who were previously not covered by the Act (such as those earning above RM2,000 per month) can now rely on the statutory law. Previously, this category of employees had to rely solely on the terms of their employment contracts — which led to a certain degree of confusion for both employers and employees.
2. Flexible working arrangements
The amended Employment Act now includes Part XIIC — a crucial section that provides for flexible working arrangements. This is particularly important for the post-pandemic business landscape, with flexible work arrangements and other modern work models now becoming more commonplace.
Under Section 60P and 60Q, employees can now apply in writing for flexible work arrangements from employers. Then, employers must respond with a decision within 60 days, and in cases of rejection, reasons must be given to employees.
3. Change in the employee maximum working hours
Previously, employees in Malaysia had a maximum number of weekly working hours of 48 hours, however starting from 1st January 2023, the maximum working hours per week have been reduced to 45 hours. Employers should also be mindful that the other existing provisions of working hours under Section 60A (1) of the Employment Act (EA) 1955 remain.
4. Sick leave
Changes will also be made to sick leave by getting rid of the rule that says the total amount of sick leave and hospital stays can't add up to more than 60 days. This will give employees 60 days of sick leave if they need to stay in the hospital, in addition to their normal sick leave allotment.
5. Increased (paid) maternity leave
Previously, the EA 1955 provided paid maternity leave entitlement for just 60 days, but in amendment 2022 for working mothers who are recovering post-delivery has increased from 60 days to 98 days.
6. The introduction of (paid) paternity leave
The new amendment includes a provision for working fathers to 7 days of consecutive paid paternity leave under Subsection 60FA.
Some conditions, however:
The male employee must be married to the mother in question
He must have been employed by the same employer for at least 12 months
He must notify the employer at least 30 days from expected confinement (or as early as possible)
7. Provision of employment when there is no contract of service
According to the Bill, if an employee does not have a written contract of service, they are deemed to be an employee in any proceeding for an offense under the Act if:
Their manner of work is subject to the supervision or control of another person
Their working hours are under the supervision or control of another person
They receive tools, supplies, or equipment from another individual to do a task
Their work is a crucial component of another person's enterprise
Their effort is made purely for another person's profit
They receive compensation for the task they perform on a regular basis, and this compensation makes up most of their income
On the other hand, when the positions are reversed, one is assumed to be the employer.
8. Awareness for sexual harassment
A new section that purportedly looks to raise awareness on sexual harassment in the workplace is Section 81H. Now, employers are required to display a notice to raise awareness on sexual harassment in the workplace. This notice must be placed in a conspicuous location, and it must be displayed at all times.
The amendment has raised the fine from RM10,000 to RM50,000 for employers who don't look into claims of sexual harassment. Employers must now also post a notice to raise awareness about sexual harassment in the workplace.
9. Employment and termination of foreign workers
Changes have also been made to Section 60K, which covers the employment of foreign workers. Previously, employers who hired foreign workers had to inform the Director-General about their new hires and give details about them within 14 days.
With the 2022 amendment, however, employers who want to hire foreign workers must now get permission from the Director-General first. If approval is not obtained, it may result in a fine of up to RM 100,000, up to five years in prison, or both.
Employers must also tell the Director-General within 30 days if or when they terminate the employment of a foreign worker (or in the case of expiry of employment pass, repatriation, or deportation). If a foreign employee is absconding, i.e., quits without telling their employer, the employer has 14 days to tell the Director General.
10. Discrimination
Even though the Amendment doesn't have clear rules or punishments for discrimination in the workplace, it does say that the Director General can look into any dispute between an employer and an employee about discrimination in the workplace and take a decision.
With the new Act, it is an offense for an employer not to follow any order from the Director General. If the employer is found guilty, they will have to pay a fine of up to RM50,000. If the offense continues after conviction, the employer will have to pay a fine of RM1,000 per day.
11. Forced Labor
According to the amendment, it is unlawful for any employer to intimidate, lie to, or coerce an employee into doing labor or prevent them from leaving the workplace. Employers who commit this offense face a maximum punishment of RM100,000, a maximum sentence of 2 years in prison, or both.
*Disclaimer: The above article is meant for general information only and is not intended to be used as legal advice. Adam Management Services ‘AMS Malaysia’ has no obligation or responsibility with respect to any actions taken based on the provided information.
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