Pursuant to Gazette Notification [P.U,(B) 368/2022], the Employment (Amendment) Act 2022 (“the Amendment Act”) will come into operation on 1.9.2022. However, the Minister of Human Resources announced that the implementation of the amendments will only come into operation on 1.1.2023 instead of 1.9.2022 as initially planned.

However, we have to take note that the Employment Act 1955 (“the Employment Act”) (as amended by the Amendment Act and the Amendment Order) are only applicable to Peninsular Malaysia.

So, what are the key amendments made to the Employment Act? 

(1) First of all, the Employment Act will apply to all employees regardless of their monthly wages subject to certain exceptions

The Employment Act will now apply to all employees regardless of their monthly wages, save and except that the following sections will not apply to employees whose monthly wages exceed RM4,000:

  • Section 60(3):

the rates of payment to employees who are required to work during their rest days;

  • Section 60A(3):

the rate of payment to employees who work overtime during a normal working day;

  • Section 60C(2A):

enable the Minister of Human Resource to make regulations relating to the entitlement of allowance during the employees’ shift work;

  • Section 60D(3):

provides the rates of payment to employees who are required to work during a public holiday;

  • Section 60D(4):

provides that if any holiday that falls on a half working day, the ordinary rate of pay shall be that of a full working day; and

  • Section 60J

provides for termination, lay-off and retirement benefits.

(2) 98 days of Paid Maternity Leave

Prior to the Amendment, the paid maternity leave under the Employment Act is only 60 days. Now, the paid maternity leave will be increased to 98 days.

(3) Paternity Leave

Other than the paid maternity leave, the paternity leave has also been increased from 3 days to 7 days.

(4) 45 working hours in a week

The weekly working hour of an employee will be reduced from 48 hours in a week to 45 hours in a week. Therefore, the overtime rates will be charged for any hours in excess of the revised total 45 hours per week. However, the overtime rates will not apply to employees whose monthly wages exceed RM4,000.

(5) Presumption of Employment

The amendment introduces the presumption of employment — even if there isn’t a written contract. Once the following conditions have been met, an individual should be considered to be an employee under law if:

  • Their manner of work is subject to the control or direction of another person;
  • Their hours of work are subject to the control or direction of another person
  • They are provided with tools, materials or equipment by another person to execute work
  • Their work constitutes an integral part of another person’s business
  • Their work is performed solely for the benefit of another person; or

  • Payment is made to them in return for work done by them at regular intervals and such payment constitutes the majority of his income.

(6) Flexible Working Arrangement (subject to the discretion of the Employers)

By introducing the new Amendment, the employees can apply for flexible work arrangement with their employers to vary the hours of work, days of work or place of work in relation to his employment. Upon the application, an employer shall, within 60 days from the date such application is received, approve or refuse the application.

However, the employers have the right to exercise their prerogative on whether or not such application will be allowed within 60 days from the date the application was made where the grounds of refusal shall be given to the employee.

(7) Employers to obtain prior approval from the Director General of Labour before employing foreign employees

According to the amendment, the employers shall obtain the prior approval from the Director General of Labour before employing foreign employees where an application for the approval shall be made in the form and manner as may be determined by the Director General of Labour. Failure to do so is an offence and on conviction, the employer shall be liable to a fine not exceeding RM 100,000 or to imprisonment for a term not exceeding five years, or to both.

Upon approval of the Director General of Labour, an employer shall, within 14 days from the date of the employment of a foreign employee, furnish the Director General of Labour with the particulars relating to the foreign employee in such manner as the Director General of Labour may direct.

(8) Paid Sick Leave (when hospitalisation is not necessary) will be excluded when using 60 days of Paid Hospitalisation Leave

The employees will not be required to use any of their paid sick leave entitlement (when hospitalisation is not necessary) when using their 60 days of paid hospitalisation leave in each calendar year.

(9) Discrimination

The amendments empower the Director General to 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 of Labour may, pursuant to such decision, make an order. An employer who fails to comply with any order of the Director General commits an offence, and shall, on conviction, be liable to a fine not exceeding RM50,000. In the case of continuing offence, the employer shall be liable to a daily fine not exceeding RM1,000 for each day the offence continues after conviction.

(10) Exhibit of Notice of Sexual Harassment at the Workplace

Section 81H of the Employment Act states that the employers must exhibit conspicuously a notice to raise awareness on sexual harassment at the workplace.

(11) Prohibition of Forced Labour

Any employer is prohibited from forced labour, i.e. threatening, deceiving or forcing an employee to do any activity, service or work and prevents that employee from proceeding beyond the place or area where such activity, service or work is done.

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