Malaysia’s employment act changes now in effect

Employers take note: new rules cover working hours, leave entitlements, flexible work arrangements

Malaysia’s employment act changes now in effect

The Malaysian government is introducing a string of expanded benefits for employees under the newly implemented Employment (Amendment) Act 2022.

The legislation, which began taking effect on January 1, amends Malaysia's Employment Act 1995 to bring about changes to working hours, leave entitlements, flexible working arrangements, among others.

Under the legislation, weekly work hours for employees are reduced from 48 to 45 hours, according to the document published on the Attorney General's Chambers of Malaysia website.

Maternity, paternity leave

The legislation also introduces seven days of paid paternity leave for married male employees who have been employed by the same employer for at least 12 months.

For female employees, maternity leave is also expanded to 98 days from the previous 60 days.

The amendment also makes it an offence for employers if they terminate a female employee under maternity leave who is suffering from an illness arising from her pregnancy.

According to the amendment, if an employee under maternity leave is terminated, the "burden of proving that such termination is not on the ground of her pregnancy or on the ground of illness arising out of her pregnancy shall rest on the employer."

Flexible work arrangements

Employees can also apply for flexible working arrangement under the newly implemented legislation, and employers would be required to approve or refuse this application within 60 days.

"The employer shall inform the employee in writing of the employer's approval or refusal of the application," the document read. "[In] the case of a refusal, the employer shall state the ground of such refusal."

Flexible work has been a hotly debated subject prior to the implementation of the Employment (Amendment) Act. An Ipsos report previously revealed that 74% of employees want flexibility in their workplace.

Employers, however, pointed out that some of them wouldn't be able to implement flexible work due to the nature of their jobs.

Human Resources Minister V. Sivakumar responded saying that the newly implemented legislation will not mandate them to implement flexible working hours.

Presumption of employment

The new legislation also sets out guidelines on who is an employee and an employer in the absence of a written contract of service. According to the amendment, a person is presumed to be an employee if they are provided with tools, materials, or equipment by another person to execute work and their:

  • manner of work is subject to the control or direction of another person
  • hours of work are subject to the control or direction of another person
  • work constitutes an integral part of another person's business
  • work is performed solely for the benefit of another person
  • pay is made in return for work done at regular intervals and such payment constitutes the majority of their income.

An individual will be presumed an employer if:

  • they control or direct the manner of work of another person
  • they control or direct the hours of work of another person
  • they provide tools, materials, or equipment to another person to execute work
  • the work of another person constitutes an integral part of their business
  • another person performs work solely for their benefit
  • they are paid in return for work done for them by another person

The amendments benefit gig workers who have been urging for better protections since the industry's boom amid the pandemic.

In Singapore, while gig workers aren't considered employees, they will soon receive work injury compensation and pension coverage benefits that regular employees enjoy.

In the Philippines, a bill was filed in 2022 seeking to recognise gig workers as regular employees and receive all normal worker protections.

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