The Malaysian Government is in the midst of proposing several amendments to the Employment Act 1955 (“EA 1955”). The Employment (Amendment) Bill 2021 (“Bill”) was tabled for first reading in Parliament on October 25th , 2021. The Bill seeks to amend the EA 1955 to comply with the international standards and practices as required by the Trans-Pacific Partnership Agreement, the Malaysia-United States Labor Consistency Plan and the International Labor Organization.

The key amendments proposed by the Bill are summarized below:

1. Calculation of Wages for Month’s Work

The Bill seeks to introduce a new Section 18A, containing a formula for the calculation of wages for an employee who is employed on a monthly rate of pay and has not completed a whole month of service due to any of the following reasons: (a) his / her employment commenced after the first day of the month; (b) his / her employment terminated before the end of the month; (c) he /she took leave of absence without pay; or (d) he / she was called up for national service under the National Service Act 1952

The proposed formula is as follows:

The Bill seeks to increase the paid maternity leave entitlement from sixty (60) days to ninety (90) days and to make it an offence for an employer to terminate the employment of a female employee who is pregnant or is suffering from an illness out of her pregnancy, unless the termination is on grounds of (a) willful breach of a condition of the contract of service; (b) misconduct;...

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