The Employment (Amendment) Act 2022 was introduced with the aim of increasing and improving the protection and welfare of employees. It seeks to ensure that employees receive necessary protections and benefits that are available to them and that Malaysian employment standards are aligned with international labor standards. The Act became enforceable from January 1, 2023.
The Act covers all private sector employees, including local and foreign workers, regardless of their salary earned. It applies to those on contract of service, whether on a permanent or fixed-term basis, in Peninsular Malaysia and the Federal Territory of Labuan.
Some of the highlights of the Act include:
- Normal working hours reduced from 48 hours per week to 45 hours per week.
- Maternity leave extended from 60 days to 98 days.
- Paternity leave entitlement increased to 7 days.
- Sick leave increased to 60 days for hospitalisation, plus additional days of sick leave based on the year of service.
- Introduction of Flexible Working Arrangement.
- Calculation of wages for incomplete months of work.
- Apprenticeship minimum period of 6 months and a maximum period of 24 months.
- Prohibition of discrimination in employment, forced labor and termination of pregnant employees.
- Obligation for Contractor for labor to enter into written contract.
- Director’s General prior approval for employment of foreign employees and for payment of wages in cash or cheque.
- Notice of awareness on sexual harassment.
However, the Act exempts those who earn more than RM4,000.00 from certain provisions. The exemptions are as follows:
- Section 60 (3): Employees cannot claim work pay/overtime pay for work on rest days.
- Section 60A (3): Employees cannot claim overtime pay for work after normal working hours.
- Section 60C (2A): Employees cannot claim shift work allowance.
- Section 60D (3) & (4): Employees cannot claim work pay/overtime pay for work on public holidays.
- Section 60J: Employees cannot claim termination, layoff, and retirement benefits.
These exemptions mean that employees who earn more than RM4,000.00 are not entitled to claim the above-mentioned benefits under the Act. However, they are still entitled to other benefits and protections under the Act, including but not limited to annual leave, sick leave, and maternity leave, among others.
Overall, the Act aims to provide better protection and benefits for employees in Malaysia, align with international labor standards, and enhance the employment relationship between employers and employees in the private sector.