What is the Malaysia Employment Act 1955?
The Malaysia Employment Act 1955 is a legislative framework that governs the terms and conditions of employment for employees in Peninsular Malaysia and Labuan. The Act aims to protect employees by regulating areas such as wages, working hours, holidays, and termination of employment.
The Act applies to employees earning a monthly salary of RM4,000 and below, as well as to manual laborers and domestic workers, regardless of their salary.
Key Provisions of the Malaysia Employment Act
The Employment Act covers a wide range of employment-related matters, including:
1. Working Hours and Overtime
- Normal working hours: 8 hours per day or 48 hours per week.
- Overtime pay: Employees are entitled to overtime pay if they work beyond normal working hours. The overtime rate is typically 1.5 times the hourly wage on regular working days and higher rates for rest days and public holidays.
2. Rest Days and Public Holidays
- Employees are entitled to one rest day per week.
- Employers must provide employees with 11 paid public holidays per year, including five mandatory holidays such as the National Day and the birthday of the Yang di-Pertuan Agong.
3. Annual Leave and Sick Leave
- Annual leave entitlement varies based on the length of service:
- Less than 2 years: 8 days
- 2-5 years: 12 days
- More than 5 years: 16 days
- Sick leave entitlement depends on the years of service:
- Less than 2 years: 14 days
- 2-5 years: 18 days
- More than 5 years: 22 days
- Hospitalization leave: 60 days per year, in addition to regular sick leave.
4. Maternity Leave and Protection
- Female employees are entitled to 98 consecutive days of paid maternity leave.
- Employers are prohibited from terminating a female employee solely due to her pregnancy.
5. Termination and Layoff Benefits
- Employees are entitled to termination benefits if their employment is terminated, except in cases of misconduct.
- The amount of compensation varies based on the length of service:
- Less than 2 years: 10 days' wages per year of service
- 2-5 years: 15 days' wages per year of service
- More than 5 years: 20 days' wages per year of service
Recent Amendments to the Malaysia Employment Act
The Malaysia Employment Act underwent significant amendments in 2022 to better align with international labor standards. Key changes include:
- Expansion of Coverage: The salary threshold was increased, and more categories of employees are now covered under the Act.
- Flexible Working Arrangements: Employees can now apply for flexible working arrangements, including changes to working hours, days, or locations.
- Increased Maternity Leave: Maternity leave entitlement increased from 60 days to 98 days.
- Paternity Leave: Introduction of 7 days of paid paternity leave for fathers.
- Workplace Discrimination Prohibition: Employers are prohibited from discriminating against employees based on gender, race, religion, or other protected characteristics.
Importance of Compliance for Employers
Employers in Malaysia must ensure compliance with the Employment Act to avoid legal repercussions. Non-compliance can result in penalties, fines, and reputational damage. Here are some steps employers can take to comply:
- Maintain Accurate Records: Keep detailed records of employees' working hours, wages, and leave.
- Provide Clear Employment Contracts: Ensure that employment contracts align with the provisions of the Act.
- Implement Fair HR Policies: Develop and enforce HR policies that comply with the latest amendments to the Act.
Rights of Employees Under the Malaysia Employment Act
Employees have the right to:
- Receive timely payment of wages.
- Work in a safe and healthy environment.
- Take legal action against employers for violations of the Act.
- Access benefits such as annual leave, sick leave, and public holidays.
Employees should be aware of their rights to ensure they are treated fairly in the workplace.
How MyWave.biz Can Help
Navigating employment laws can be challenging for businesses. MyWave.biz offers comprehensive HR solutions to help employers comply with the Malaysia Employment Act. Our services include:
- HR Policy Development: Crafting policies that align with legal requirements.
- Payroll Management: Ensuring accurate and timely salary payments in compliance with the Act.
- Employee Onboarding: Streamlining the onboarding process to ensure compliance from day one.
By partnering with MyWave.biz, businesses can focus on growth while we handle the complexities of employment compliance.
Conclusion
The Malaysia Employment Act 1955 is essential in protecting the rights of employees and ensuring fair treatment in the workplace. Employers must stay updated with the latest amendments to avoid penalties and foster a positive work environment. For businesses seeking professional assistance, MyWave.biz is here to help you navigate the complexities of employment laws and ensure compliance with ease.
