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The amendments to the Employment Act 1955 (EA 1955) came into force effective 1.1.2023. A summary of the amendments and practical tips for employers, is seen below:
| Entitlement / Protection | Pre-Amendment | Post-Amendment |
| Applicability of the Act | The Act was only applicable to two categories of employees:
(a) regardless of occupation, employees not earning more than RM2,000 a month; and
(b) regardless of wages, employees carrying on certain occupation such as manual workers, supervisors of manual workers, employees operating mechanically propelled vehicles, etc.
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The Act shall apply to any person who has entered a contract of service / employment contract. Provisions in the EA 1955 which shall now apply to all employees include, among others:
(a) Annual, sick and hospitalization leave;
(b) The requirement to display a list of public holidays on notice boards before the commencement of the calendar year;
(c) Restrictions on the type of deductions which can be made from an employee’s wages. All other deductions not within the list of lawful deductions under the EA 1955 would require the Director General of Labour’s (“Director General”) approval, such as reimbursement for loss of or damage to the company’s asset(s), deductions for benefits provided by an employer, etc;
(d) Restrictions on advances which can be made to an employee, including company loans;
(e) Restrictions on dismissing local employees over foreign employees;
(f) Wage period, time of payment of wages and system of payment of wages; and
(g) Maintenance of employee registers and preparation of annual returns.
Certain provisions, however, shall only apply to a select group of employees earning RM4,000 and below, such as payment for work done on rest days and public holidays, overtime payments, and termination/ lay-off benefits.
Manual workers, supervisors of manual workers, employees operating mechanically propelled vehicles, etc. shall continue to be entitled to payment for work done on rest days and public holidays, overtime payments and termination/ lay-off benefits.
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| Normal hours of work per week
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48 hours a week. | 45 hours a week.
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| Presumption of employment relationship
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None. | Introduces a set of presumptions whereby an employment relationship shall be presumed until the contrary is proven by the employer. Companies engaging the services of independent contractors should thus review their engagement terms and documentation, such as the contracts for services, to remove any indicia of an employer-employee relationship.
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| Hospitalisation leave (sick leave where hospitalisation is necessary)
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60 days minus any sick leave taken. | 60 days irrespective of any sick leave taken. |
| Maternity leave | 60 days.
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Increased to 98 days. |
| Early return to work during maternity leave | Yes, if the employee is not entitled to maternity allowance, has the employer’s consent, and is certified fit to return by a medical practitioner.
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Yes, if the employee has the employer’s consent and is certified fit to return by a medical practitioner, regardless of whether she is entitled to maternity allowance.
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| Protection of pregnant employees or if they are suffering illness arising from pregnancy | Limited to protection from dismissal while on maternity leave. | Introduces additional protection against the dismissal of any pregnant employee, or an employee suffering from an illness arising out of her pregnancy, except in certain situations such as misconduct, wilful breach of condition of the employment contract, or closure of business.
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| Restrictions on employment of women
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Prohibition of female employees to perform night work and underground work.
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These restrictions have been removed.
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| Paternity leave | No statutory entitlement. | 7 consecutive days of paid leave.
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| Flexible working arrangements | None. | Employees may apply for flexible working arrangements to vary the hours of work, days of work or place of work. This must be responded by the employer within 60 days. Reasons must be provided in writing if the application is rejected. According to the Minister of Human Resources, there is no compulsion on the employer to implement such flexible working arrangements.
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| Requirement to exhibit a notice to raise awareness on sexual harassment
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None. | Employers are required to exhibit conspicuously a notice to raise awareness on sexual harassment at the place of employment. A physical copy must be exhibited on a notice board.
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| Apprenticeship | An apprenticeship contract referred to a written contract to train a person for a minimum period of 2 or more years. | An “apprenticeship contract” now refers to a written contract to train a person for a minimum period of six months and a maximum period of 2 years. Apprentices are usually defined as those trained in blue-collar industries for a fixed period to acquire a specific skill. However, if a liberal interpretation is applied, interns may fall within this category, depending on the kind of work they are engaged in.
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| Approval for hiring foreign employees | Only required to notify the Director General of Labour (‘Director General’) of hiring of foreign employees. | Approval of the Director General is required which is subject to certain conditions. According to the Minister of Human Resources, this will apply to both expatriates and foreign workers.
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| Prohibition of forced labour | None. | Forced labour is a defined offence punishable by a fine and/or imprisonment. Employers, particularly those in sectors engaging blue-collar workers, must keep a check on practices at factories, estates etc, to ensure compliance.
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| Discrimination in employment | Limited to a complaint from a local employee that he is discriminated against in relation to a foreign employee and vice versa in respect of terms and conditions of employment. | Introduces a new provision which allows the Director General to inquire into and decide any dispute between an employee and his employer in respect of any matter relating to discrimination in employment. Employers should keep a check on potentially discriminatory practices during appraisals, requirements for pre-employment medical check-ups.
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| Increase of penalty | The general penalty for an offence under the Act and penalty for failure to comply with a decision or order of the Director General was RM10,000.
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The penalty has been increased to RM50,000. |
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