As reported in the news, the Malaysian Employment Act has been recently amended to extend the maternity leave period and grant paternity leave to male employees (for details of the amendments, please refer to our May newsletter issued earlier this year).
This Amendment Act made no mention of any changes to the scope of the Employment Act, which in principle only applies to employees earning less than 2,000 ringgit per month.
However, on 15 August 2022, the Ministry of Human Resources, the ministry overseeing employment matters, published a Ministerial Order in the Federal Gazette amending the First Schedule which sets out the scope of application of the Employment Act (EMPLOYMENT (AMENDMENT OF FIRST SCHEDULE) ORDER 2022 (“the Ministerial Order”). The Ministerial Order and the Amendment Act are to come into force on 1 January 2023, based on a subsequent Cabinet decision.
This article lays out the extended scope of the Employment Act and attempts to examine how companies should respond to these changes. Many Japanese-owned companies, except those in the manufacturing industry, had no issue paying no attention to the Employment Act in the past, as their employees' salaries are thought to be more than RM2,000.
Prior to the changes, the Employment Act in principle only applied to employees earning less than RM2,000 a month.
The relationships between the...
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