[Malaysia] Statutory Updates on New Amendments to the First Schedule of Malaysia’s Employment Act 1955

The amendments to the First Schedule of the Employment Act 1955 which sets out the scope of employees covered under the Employment Act gazetted on 15 August 2022 has officially came into force on 1 January 2023.

Changes to the scope are as follows:

New wage covered by Employment Act (EA)

Any employees, irrespective of occupation, who enter into a contract of service with an employer under which such person's wages do not exceed RM4,000 a month is protected by the Employment (Amendment) Act. The previous wage cap of RM2,000 has now been removed. Therefore, the employee will now entitle to claim for overtime, rest days, off days, shift allowance and termination benefits.

This however does not apply to employees whose wages exceed RM4,000 per month. Such employees may enter into a contract with the Company and would be subject to its Company’s policy which may apply or exceed the same applicable entitlements according to the provisions of the EA. 

Extension of maternity leave

An increase in maternity leave from 60 days to 98 days, in line with recommendations made by the International Labour Organisation (ILO) Convention.

Restriction on termination of pregnant employees

Employers are restricted from terminating a pregnant employee or an employee suffering from an illness arising out of pregnancy. It would be an offence for the employer to terminate her services or to give her notice of termination of service except on the grounds of misconduct, wilful breach of a condition to the employment contract, or closure of the employer’s business.

Introduction of paternity leave

Married male employees are entitled to 7 consecutive days of paid paternity leave with respect to confinement. The eligibility will be limited to only five confinements, regardless of the number of wives, with the paternity leave to take effect from the day of the birth.

The employee must be employed for at least 12 months with the same employer to be eligible. The employee must notify his employer of the pregnancy of his spouse at least thirty days from the expected confinement or as early as possible after the birth.

Notice on sexual harassment

Employers are required to conspicuously exhibit a notice to raise awareness on sexual harassment at the workplace.

Reduction in limit on regular working hours

The weekly limit on regular working hours has been reduced from 48 hours to 45 hours.

Separation of entitlement paid sick leave and hospitalisation leave

All employees are entitled to 60 days of hospitalisation leave on top of the entitlement for the paid sick leave.

Employment of foreign employees

Employers must obtain prior approval from the Director General of Labour to hire a foreign employee. Failure to do so is an offense and on conviction, in which case the employer shall be liable to a fine not exceeding RM 100,000 imprisonment for a term not exceeding five years or both.

Flexible working arrangement

This includes allowing staff to apply for flexible work arrangements with their employers depending on the suitability of the working hours, working days or workplace.

This article serves as general information only and is not a representation of actual advice.

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