New benefits introduced in 2022 include 7 days of paid paternity leave
Chinese employers in Malaysia now prefer to hire men over women to offset the impact of the expanded maternity leave entitlements under the Employment Act 2022, according to a new report.
"Respondents have indicated a shift to a higher male-to-female ratio in their employment (41.3%) to mitigate against the impact of higher maternity leave," said the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM).
Malaysia's Employment (Amendment) Act 2022 introduced a string of new benefits for employees that include seven days of paid paternity leave and 98 days of maternity leave for female workers.
ACCCIM's Malaysia's Business and Economic Conditions Survey, which garnered 761 responses, found that 44.9% of employers felt "high" impact in the higher maternity leave.
Another 40.4% said they felt "moderate" impact, while only 14.7% said they did not feel it at all.
As a result, the report warned that the higher maternity leave benefits will also "encourage employers to favour male workers or part-time women workers as they are exempted from the statute."
"This does not bode well for encouraging women's participation in the labour force and promoting gender equality," the report said.
Sharing maternity leave costs
To address the problem, the respondents suggested the following initiatives to ease their business costs:
- Funding the maternity benefits through PERKESO or the Employment Insurance System
- Co-share an additional 38 days of maternity benefits by the government
- Double tax deduction for an additional 38 days of maternity benefits
"It is proposed that the government can consider a workable co-sharing payment of maternity benefits to lessen the cost burden on businesses," the report said. "At the same time, continue supporting the participation of women in the labour force. Singapore's mode of maternity benefits payment is a viable option. We can also explore the option of using SOSCO to fund the maternity benefits partially."
Impact of Employment Act
In addition to higher maternity leave benefits, the report also found the impact of other provisions in the newly implemented Employment (Amendment) Act 2022, such as reduced working hours, higher threshold for overtime, and widened coverage for all employees.
According to the report, around 80% of respondents had higher employment costs due to reduction of working hours (79.3%) and higher threshold for overtime payment (80.7%).
"Operation disruptions, gender discrimination, and cost-push inflation could be the side effects causing economic and social sustainability," the report said.
"For instance, businesses hire workers willing for longer working hours, with or without proper overtime payment, or have a family background check on the pregnancy status to avoid 'high-risk' females. Increases in operating costs force businesses to partially pass-through additional costs onto consumers in the form of higher prices of goods and services."
