Are you an employer aware of the upcoming changes to the Employment Act in 2023? With new amendments on the horizon, businesses must stay informed and understand their obligations. 

The Employment Act Amendment addresses various aspects of employment, such as fair treatment, employee rights, and workplace safety. These changes will have a significant impact on how businesses operate and how they interact with their employees.

This article will break down the key amendments and provide a comprehensive overview of what employers should abide by in 2023.

Overview of the Roles and Responsibilities of Employers

The Employment Act Amendment in 2023 introduces several changes that employers in Malaysia must abide by. These amendments aim to provide better protection for employees and promote a healthy work-life balance.

Employers are required to adhere to the new rules and regulations to ensure compliance and maintain a positive working environment.

Let's delve further into the details below:

1. Changes to Working Hours

Under the Employment Act Amendment in 2023, there has been a notable change in the maximum working hours per week for employees in Malaysia.

Previously, the standard maximum working hours per week were set at 48 hours. However, with the recent amendment, this has been reduced to 45 hours.

The reduction in working hours aims to promote work-life balance and improve employees' well-being and productivity. It recognises the importance of allowing employees to have more time for personal and family commitments outside of work.

Employees who are required to work beyond the maximum of 45 hours per week are entitled to receive overtime pay.

The Employment Act specifies that overtime pay should not be less than 1.5 times the employee's hourly pay rate. This provision ensures that employees are compensated fairly for their additional work hours.

2. Flexible Work Arrangement

The amended Act includes a section providing for flexible working arrangements under Sections 60P and 60Q.

The flexible working arrangement, as provided in the Employment Act (EA) of Malaysia, gives employees more control over their working hours, enabling them to balance their personal and work commitments effectively.

Employers should adopt policies that cover flexible working arrangements to provide a supportive and inclusive work culture.

Key aspects of a flexible working arrangement may include options such as flexible start and end times, compressed workweeks, part-time work, job sharing, and telecommuting. These policies can promote work-life balance, enhance employee well-being, and contribute to increased productivity.

3. Discrimination in Employment Against Female Employees

The amendments made under the Employment Act 1955 in Malaysia have significant implications for female employees, including pregnant ones. Here is a detailed explanation of what these amendments mean for them:

a. Protection against termination

Pregnant female employees and those with pregnancy-related illnesses are now protected against termination, except for specific reasons. This means that employers cannot terminate the employment of pregnant employees without valid reasons unrelated to their pregnancy or illness.

b. Increased maternity leave

The amended Act extends maternity leave from 60 days to 98 days for new mothers. This provides pregnant female employees with more time to recover from childbirth and bond with their newborns.

c. Introduction of paid paternity leave

The amended Act introduces paid paternity leave for the first time. According to Subsection 60FA, fathers can take 7 consecutive days of leave after their child is born. To qualify for paternity leave, fathers must be married to the mother, have at least 12 months of employment, and give their employers 30 days' notice.

4. Rights for Foreign Workers

In the past, employers had a requirement to notify the Director-General regarding new foreign employees within a 14-day period.

Under the 2022 amendment, employers must obtain prior approval from the Director-General to hire foreign employees. This entails seeking permission before employing any foreign workers.

Additionally, employers must notify the Director-General within 30 days when foreign employees are terminated. This ensures that the relevant authorities are kept informed about changes in the employment status of foreign workers.

For foreign employees, these amendments provide protection and accountability from their employers. The amendments help to ensure that employers are following proper procedures and not exploiting foreign workers.

Foreign employees should also be aware of their rights and entitlements under the Employment Act. They should familiarise themselves with the provisions of the Act and seek legal advice if they believe their rights are being violated.

5. Sexual Harassment Awareness

Under the amendments made to the Employment Act Malaysia, there is an increased emphasis on sexual harassment awareness in the workplace.

Section 81H of the amended Act now requires employers to display a notice raising awareness about sexual harassment.

The notice should include information about what constitutes sexual harassment, examples of prohibited conduct, and the consequences of engaging in such behaviour. It should also include details on how employees can report incidents of sexual harassment, including the contact information for relevant personnel or departments within the organisation.

This amendment aims to ensure that employees are aware of their rights and are empowered to take action if they experience or witness sexual harassment. 

6. The Amendment Applies to ALL Employees

Previously, the Employment Act only covered employees earning RM2,000 and below. However, the amendments now ensure that all employees, regardless of salary, are protected under the Act.

This means previously uncovered employees, who earned above RM2,000 per month, can now rely on statutory law for their rights and entitlements.

7. Not All Parts of Malaysia Will Be Covered By This Amendment, However

The amendments to Malaysia's Employment Act, which came into effect on 1 January 2023, apply only in Peninsular Malaysia and the Federal Territory of Labuan.

Sabah and Sarawak still adhere to their respective labour ordinances until they are amended.

It is important to note that the amendments also apply to all private sector workers in Peninsular Malaysia and the Federal Territory of Labuan, regardless of the salary limit. This means that all private sector employees, irrespective of their salary, are now protected and eligible for benefits under the act.

However, highly paid employees earning over RM 4,000 per month (excluding manual workers) are not eligible for overtime pay and certain benefits.

Overall,

Overall, the Employment Act Amendment in 2023 provides employers and employees greater clarity and certainty in their rights and responsibilities.

The amendment ensures that all employees across sectors are covered by the Act regardless of salary, while foreign workers are now provided with additional protection and accountability from their employers.

Additionally, the inclusion of sexual harassment awareness notices is a positive step towards creating safe and secure working environments for everyone.

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