Some employers cautious about scheme amid concerns it could further strain businesses
The Malaysian government has unveiled a new Post-Maternity Leave Allowance following findings that maternity commitments are dragging down labour force participation among women, according to reports.
Malaysian Prime Minister Datuk Seri Anwar Ibrahim announced the new scheme at the 2026 National Workers' Day Celebration last week.
"This allowance is financial assistance for additional leave of up to 30 days per month taken after the end of the 98-day maternity leave period," the prime minister said as quoted by Bernama.
According to Anwar, the allowance would be paid in one lump sum. It will also be set at 80% of the monthly assumed salary for insured female employees.
The new benefit will be introduced by amending the country's Employment Insurance System Act 2017. It is expected to benefit more than 132,000 female employees across the country.
Eligible employees include female workers who worked for at least 90 days in the nine months before giving birth, worked for at least one day in the four months before giving birth, and have less than five surviving children, according to the Bernama report.
Anwar said the new allowance comes after new data revealed that the labour participation rate declined for women aged between 25 and 39. The prime minister noted that part of the reason for this decrease is their maternity commitments.
"The rationale is that we do not want mothers to feel forced to quit and leave the field of work after that, as has happened so far," he said as quoted by Bernama.
Reservations from businesses
Meanwhile, some businesses in Malaysia are expressing concerns about the impact of the upcoming maternity allowance on operational costs.
The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) warned that businesses will continue to bear indirect and operational costs from the scheme.
"While this is a positive step, the Chamber stresses that it does not translate into zero cost for businesses," the ACCCIM warned in a statement.
"Employers will continue to bear indirect and operational costs, including workforce replacement, training, workflow adjustments and productivity management. These challenges are particularly significant for small and medium enterprises (SMEs), which operate with limited manpower flexibility."
It also warned of possible "unintended consequences" resulting from the scheme, particularly on female employment.
"Higher employment costs and workforce uncertainties may influence hiring and promotion decisions, particularly involving women of childbearing age, potentially giving rise to indirect workplace discrimination," it warned.
The ACCCIM called on the government to carry out comprehensive consultations with businesses to introduce targeted support mechanisms prior to the implementation of the scheme.
"These should include cost-sharing initiatives such as incentives for temporary workforce arrangements, tax relief measures, and the strengthening of enabling ecosystems, including accessible childcare services and flexible work frameworks, as well as the reinforcement of legal safeguards to prevent employment discrimination," it said.
It also called for a reasonable transition period for employers, stressing that it should strike a balance between social objectives and business sustainability.
The ACCCIM made the call as it highlighted that businesses are facing rising cost pressures due to global oil and energy price volatility.
"In this context, the timing of introducing such measures should be carefully considered to avoid adding further strain on businesses," it said.
