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New Employment Act Malaysia 2022 : What Changed? [Extended to 1st Jan 2023]

by waileong for Blog Post

In 2021, amendments on the Employment Act under the labour law Malaysia was submitted, and in 2022, these amendments are finally gazetted and will be enforced on 1st September 2022.
The Employment Act Malaysia 2022 has included a series of amendments in the Employment Act 1955 and the recent revisions of the First Schedule of EA.

New Employment Act Malaysia 2022 : What Changed? [Extended to 1st Jan 2023]
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New Employment Act Malaysia 2022: What Changed? [Extended to 1st Jan 2023]

In 2021, amendments on the Employment Act under the labour law Malaysia was submitted, and in 2022, these amendments are finally gazetted and will be enforced on 1st January 2023.

The Employment Act Malaysia 2022 has included a series of amendments in the Employment Act 1955 and the recent revisions of the First Schedule of EA.

So, what changed and how does the new labour law Malaysia affect employers and employees in Malaysia?

First Schedule Revision: EA Applicable to All Employees Now

In the latest revision to the First Schedule, all salaried employees, regardless of wages and type of work, are benefited and protected by the Labour Law Malaysia, under the Employment Act Malaysia 2022 (Peninsular Malaysia), where they are benefited to:

Some Exceptions

However, for employees earning more than RM4000, these sections and subsections are NOT applicable:

What should Employers Look Out for in the New Labour Law Malaysia?

Here are some of important amendments in Employment Act Malaysia 2022 that employers and HRs should be aware of:

1. Amendment of apprenticeship contract definition
The apprenticeship service period shall be a minimum period of 6 months and the maximum period of 24 months.

calculation-of-wages

2. Calculation of wages for incomplete month’s work (New Section 18A)

The Employment Act Malaysia 2022 indicates the calculation of wages where employee did not complete a whole month service under these conditions:

a. employees join the company after 1st day of the month.
b. employee is terminated before the end of the month.
c. employee took “leave of absence without pay” for one or more days of the month; or
d. employee took leave of absence due to national service.

their wages should be calculated according to the formula below:

For example, if an employee starts his employment in a company at 5th of August 2022, his wages for August 2022 shall be calculated according to this formula:
Wages: RM 3000
Total days in August 2022: 31 days

3. Payment of wages by Financial Institutions

The new labour law Malaysia indicated that all employers must pay wages through a financial institution, where financial institution includes licensed bank, licensed Islamic bank and prescribed institution.
Employer may pay employee wages by cash or by cheque if written request is submitted by an employee and has been approved by the Director-General (labour office).

sexual-harrasment

4. Notice of Sexual Harassment

On top of the sexual harassment act, Employment Act Malaysia 2022 also added that employers should always exhibit sexual harassment notice to raise awareness on the issue in the workplace.

female-worker-restriction

5. No more restrictions on female employees’ work

In line with the Federal Constitution on gender equality, the restrictions on female employees to work on night shifts and underground work has now been removed from the labour law Malaysia.

terminate-pregnant-woman

6. Restriction to terminate a pregnant employee

Employer is not allowed to terminate a pregnant employee, unless the termination is due to misconduct, breach of employment contract or business closure under the new labour law Malaysia. Termination of a pregnant employee should be backed by proof that it is not due to the employee’s pregnancy or sickness related to pregnancy.
Employment Act Malaysia 2022 also prohibited employer to terminate a female employee that remain absent after the eligible period, if, based on the new labour law Malaysia, the female employee is absent due to illnesses cause by pregnancy and confinement after giving birth, with the maximum period of 90 days (requires certification by a registered medical practitioner).

Amendments on Employee Entitled Leave

1. 98-day Maternity Leave

Extension of existing maternity leave and allowance benefit from 60 days to 98 days.

2. 7-day Paternity Leave

Male employee is entitled for a period of 7 consecutive days paternity leave in each confinement, up to a maximum of 5 confinements.

3. Sick Leave and Hospitalization Leave

Employees will be entitled with a hospitalisation leave of 60 days/year and separated from the entitled sick leave of 14, 18 or 22 days, depending on the employee’s total year of service.

Foreign Employee

1. Employment of Foreign employee

Labour law Malaysia has stricken rules on foreign employee employment and it is now compulsory to obtain prior approval before employing a foreign employee.

2. Termination of Foreign Employee

Employment Act Malaysia 2022 requires employer to inform the labour office within 30 days after a foreign employee is terminated, and in the case where foreign employee quit his job or disappears, employer should notify the labour office within 14 days.

Other amendments in EA include:

1. Substituting the term “servant” to “employee”.
2. Employment Act Malaysia 2022 has added new section to define Forced Labour and that it is an offence if employer conducted such act. If convicted, the employer is liable to a fine not exceeding RM100,000 or imprisonment not exceeding 2 years or both.
3. The deletion of section 69B, additional power of the Director-General to investigate dispute case for employee salaried more than RM2000 to RM5000 is removed. Due to the amendment of First Schedule, 69B and other the relevant subsections of 69C, 69D and 69E, are no longer applicable in labour law Malaysia.
4. Excluding order /decision under section 69/73/81D(4), any unsatisfied order or decision are given an extension of period to appeal from 14 days to 21 days in the new employment Act Malaysia 2022.
5. General Penalty increase from RM10,000 to RM 50,000 – Anyone convicted with any offence under this act and/or any regulations under labour law Malaysia is liable to a fine not exceeding RM50,000.

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