Employment Act 1955 Amendments 2024: What SME Employers Must Know
Complete guide to key changes affecting Malaysian employers and HR policies
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Employment Act 1955 amendments (effective 2022-2024): Coverage expanded to ALL employees (no salary cap), maximum hours reduced to 45/week, maternity leave increased to 98 days, new paternity leave of 7 days, and right to request flexible working arrangements. Penalties increased to RM100,000 per offense.
This comprehensive guide covers all key Employment Act 1955 amendments that Malaysian SME employers must know and implement in their HR policies.
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Frequently Asked Questions
What are the key Employment Act 1955 amendments in 2024?
Key amendments: 1) Expanded coverage to all employees regardless of salary (previously RM2,000 limit), 2) Reduced maximum working hours from 48 to 45 per week, 3) Extended maternity leave from 60 to 98 days, 4) New paternity leave of 7 days, 5) Right to request flexible working arrangements.
Who is now covered under Employment Act 1955?
All employees in Peninsular Malaysia and Labuan are now covered, regardless of salary level. Previously, only those earning RM2,000 or below (or manual laborers) were covered. This extends protections like overtime pay, rest days, and leave entitlements to all workers.
What are the new maximum working hours under Employment Act?
Maximum working hours reduced from 48 to 45 hours per week. This means 9 hours per day for 5-day week, or 8 hours for some days in a 6-day week. Overtime applies beyond these limits. Spread of hours cannot exceed 10 hours including rest periods.
What is the new maternity leave entitlement?
Maternity leave increased from 60 to 98 days (14 weeks) for female employees. Eligible if employed for at least 90 days in the 4 months before confinement and with fewer than 5 surviving children. Maternity allowance at ordinary rate of pay.
What is the new paternity leave entitlement?
New paternity leave of 7 consecutive days for married male employees. Eligibility: employed for at least 12 months, married to the child's mother, and notified employer at least 30 days before expected confinement or as soon as practicable.
Can employees request flexible working arrangements?
Yes, employees can now formally request flexible working arrangements (FWA) covering: changes in working hours, working days, or place of work. Employers must respond within 60 days with reasons if rejecting. No automatic right to FWA, but formal process established.
What are the overtime pay requirements under amended Act?
Overtime pay for hours beyond 45/week (previously 48): 1.5x normal rate for normal days, 2x for rest days, 3x for public holidays. Overtime caps at 104 hours per month. Now applies to all employees, not just those under RM2,000.
What happens to existing employment contracts?
Existing contracts remain valid but terms less favorable than the amended Act are void. Employers should review and update contracts to reflect new entitlements (maternity leave, paternity leave, working hours). No need to re-sign if updates improve terms.
What are the penalties for non-compliance?
Non-compliance penalties increased: up to RM100,000 fine (from RM10,000) per offense. Directors and officers can be personally liable. Multiple offenses compound. Regular audits recommended to ensure compliance.
How should employers prepare for these changes?
Action items: 1) Review and update employee handbook, 2) Amend leave policies (maternity 98 days, paternity 7 days), 3) Adjust working hour schedules to 45/week max, 4) Update overtime calculations, 5) Create FWA request policy, 6) Train HR on new requirements.