Employment (Amendment Act) 2022
Effective 1 January 2023, significant changes will be made to the Employment Act 1955 which any companies seeking to set up a business in Malaysia should take note of. The Employment Act previously applied to those earning RM2000 and below and/or to a specific category of employees. However, some clauses would be inapplicable to those earning more than RM4,000 per month except for blue-collar workers.
Commencing 2023, employers seeking to hire foreign labourers must acquire prior approval from the Director-General instead of just furnishing particulars of employees. Where foreign employees are dismissed, the employer must notify the Director-General within 30 days after the date of termination. Besides, the Employment Act held that forced labour is prohibited, and any employer who commits such offence would be fined an amount not exceeding RM100,000.00 or imprisoned for a term not exceeding two years or both. In regard to working hours, it will be reduced to 45 hours per week (instead of 48 hours currently). If employees are required to work more than 45 hours, overtime rates would apply.
The amendments further protect women’s rights by stating that pregnant employees must not be dismissed for illnesses related to pregnancy unless the dismissal is due to misconduct, wilful breach of contract, and closure of the company. Pregnant women would also be able to have 98 days of paid maternity leave (instead of 60 days currently), to aid working...
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