THE AMENDMENTS TO THE EMPLOYMENT ACT 1955 in Malaysia (to be enforced 1 January 2023)

The salient changes in Employment (Amendment) Act 2022 (“the Amendment Act”) and Employment (Amendment of First Schedule) Order 2022 (“the Amendment Order”) are not limited as follows:

1. Calculation of wages for incomplete month’s work:

• New provision – A new formula is introduced to calculate wages for an employee who is employed on a monthly rate of pay who works for less than a whole month / for an employee who has not completed a whole month of service (where he has commenced employment after the 1st day of the month or employment being terminated before the end of the month or he took leave of absence without pay for one or more days of the month):

2. Limitation on advances to employees: Immediate family members now include “spouse”.

3. Pregnancy and maternity:

• Amended provision – In the past, the paid maternity leave period was 60 days. Pursuant to the new amendments to the EA, it has now been extended to 98 days.

• Amended provision – A female employee may commence work at any time during the maternity leave with the consent of her employer, if she has been certified fit to resume work by a registered medical practitioner, regardless of whether she is entitled to receive maternity allowance from her employer.

• New provision – New amendment provides a restriction on termination of female employee whereby it shall be an offence for her employer to terminate her services if she is pregnant or is suffering from an illness arising out of her pregnancy, except on the grounds of wilful breach of a condition of the contract of service, misconduct or closure of the employer’s business. The burden of proving that such termination rests on the employer.

4. Working hours and working at night:

Amended provision – Previously, the maximum working hours for employees is 48 hours. Pursuant to the Amendment Act, it has now reduced to 45 hours per week.

5. Shift work

Amended provision – Previously, the maximum working hours for employees is 48 hours. Pursuant to the Amendment Act, it has now reduced to 45 hours.

6. Sick Leave:

Amended provision – To delete the proviso where the aggregate of sick leave inclusive of any period of hospitalization is 60 days. This will entitle employees to 60 days sick leave if hospitalization is necessary in addition to the employee’s normal sick leave entitlement.

7. Paternity leave:

New provision – The new provision entitles a married male employee to 7 consecutive days of paid paternity leave for each confinement up to 5 confinements subject to the married male employee being employed by the same employer at least 12 months before the commencement of such paternity leave and if 30 days’ notice is given to his employer of the pregnancy of his spouse from the expected confinement or as early as possible after the birth.

8. “Servant” to “Employee”:

Amended provision – All terminology of “domestic servants” is now changed to “domestic employees”.

9. Employment of foreign employee:

Amended provision – Previously, employer is only required to furnish the Director General with particulars of the foreign employee within 14 days of his employment. Now, in order to employ a foreign employee, prior approval from Director General is required to be obtained by the employer. Otherwise, the employer is liable to a fine not exceeding RM100,000.00 or to imprisonment for a term not exceeding 5 years or to both.

10. Termination of foreign employee:

New provision – Employer shall inform the Director General of the termination of foreign employee within 30 days of the termination of service, expiry of employment pass or by repatriation or deportation. If the foreign employee’s service is terminated due to them absconding from place of employment, the employer shall inform Director General of the termination of service 14 days after the foreign employee’s absence.

11. Flexible working arrangement:

Amended provision – Previously, the employee shall report to work at the office or location at the timing as specified in the contract of service –. Pursuant to the Amendment Act, employee may now apply to an employer for a flexible working arrangement to vary the hours of work, days of work or place of work in relation to his employment. The employer may approve or refuse the application within 60 days from the date such application is received. The employer shall inform the employee in writing of the approval or refusal and in the case of refusal, the ground of such refusal.

12. Discrimination in employment:

New provision – The new amendment empowers the Director General to inquire and decide any dispute between employee and employer in any matter relating to discrimination in employment and make an order pursuant to such decision. Employer who fails to comply with the order of the Director General is liable to a fine not exceeding RM50,000.00 and in the case of a continuing offence, be liable to daily fine not exceeding RM100,000.00 for each day the offence continues after conviction.

13. Sexual harassment:

Amended provision – In the past, the fine imposed for the employer who fails to inquire into complaints of sexual harassment was RM10,000.00. Now, it has been increased to a fine of RM50,000.00. In addition, by virtue of Amendment Act, it is now a requirement that employer shall at all times exhibit a notice to raise awareness on sexual harassment conspicuously at place of employment.

14. Court order for payments due to employee:

New provision – Court may order the employer to pay any payment due to the employee in relation to that offence. If employer fails to comply with an order made, the court may now issue a warrant to levy the employer’s property for any payments due on the application of the employee: (i) by way of distress and sale of employer’s property in accordance with the same procedure of execution under the Rules of Court 2012; or (ii) by way of a fine as provided under section 283 of the Criminal Procedure Code.

15. Forced labour:

New provision – A new provision is introduced which prohibits forced labour where it is an offence for any employer to threaten, deceive or force an employee into doing any work and prevents them from leaving the place of work. Employers who commit this is liable to a maximum fine of RM100,000 or a maximum 2 years imprisonment or both.

16. General penalty:

Amended provision – Previously, the general penalty for a contravention under the Act / any subsidiary legislation made under the Act where no penalty is provided was a fine of RM10,000.00. Now, pursuant to the Amendment Act, it has been increased to RM50,000.00.20

17. Presumption as to who is an employee and employer:

New provision – In any proceeding for an offence where there is no written contract of service of employee under the First Schedule, one is presumed to be an employee until the contrary is proved —

(a) where his manner of work is subject to the control or direction of another person;

(b) where his hours of work are subject to the control or direction of another person;

(c) where he is provided with tools, materials or equipments by another person to execute work;

(d) where his work constitutes an integral part of another person’s business;

(e) where his work is performed solely for the benefit of another person; or

(f) where payment is made to him in return for work done by him at regular intervals and such payment constitutes the majority of his income.

18. Amendment to First Schedule:

Amended provision – The Amendment Act expands the scope of application of the Act to any person who has entered into a contract of service regardless of the wages payable to the employee.22 Section 60(3), 60A(3), 60C(2A), 60D(3) and 60D(4) and 60(J) are not applicable for person whose wages exceeds RM4,000.00 a month.

19. Deleted provisions: Part VIII, Section 44A, Section 60L, Sections 69B, Section 69C, Section 69D, Section 69e, Section 81G, Section 93 of the Employment Act 1955.

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