April 23, 2024

Tullio Corradini

Trusted Legal Source

Employment Act to apply to all employees from 1 September 2022, some sections subject to increased salary threshold of RM4,000/month

Employment Act to apply to all employees from 1 September 2022, some sections subject to increased salary threshold of RM4,000/month

Employment Act to apply to all employees from 1 September 2022, some sections subject to increased salary threshold of RM4,000/month

When the Work (Amendment) Act 2022 (“the Modification Act”) was gazetted previously this year, there was much confusion about what the scope of the Employment Act (“EA”) would be when the Amendment Act arrived into pressure. This confusion was fuelled by the governing administration not amending the First Timetable at the same time the Modification Act was handed, and also consistently stating that the EA’s scope would be expanded so that all employees no matter of income would be entitled to the EA advantages and protections, with a lot of industry industry experts sharing the see that these a blanket growth would be impractical for a lot of causes.

With the gazetting of the Work (Modification of Very first Timetable) Order 2022 (“First Agenda Amendment Order”) on 15 August 2022, there at last is clarity on the scope of the EA from 1 September 2022.

EA salary threshold increased from RM2,000 to RM4,000

Prior to the new amendments, the extensive the greater part of the EA only utilized to workers earning up to RM2,000/month, or to specified teams of workforce irrespective of wages (e.g. all those engaged in or supervising handbook labour, and quite a few other teams). The existing EA set out specific provisions to enable non-EA workers to also be incorporated in the sections of the EA pertaining to maternity protection (Part IX) and sexual harassment (Aspect XVA).

Next the Very first Agenda Modification Order which will appear into drive on 1 September 2022, the way the EA scope is defined has been reversed. Though it earlier only utilized to staff earning up to RM2,000/month with some unique sections making use of to all staff members, it will now use to all staff members irrespective of wages, with some distinct sections not applying to workforce earning more than RM4,000/thirty day period. Here are the aspects:

  1. The EA will now apply to “any man or woman who has entered into a deal of service”.
  2. Nevertheless, the sections of the EA in relation to extra time payments and termination advantages will not use to staff whose wages exceed RM4,000/month (the comprehensive listing of excluded EA provisions is mentioned underneath).
  3. The listing of EA provisions which do not apply to domestic staff members (beforehand known as domestic servants) has also been expanded.

This is the total record of EA provisions which will not use to personnel earning additional than RM4,000/month:

  • Subsection 60(3): Additional time for perform on relaxation times.
  • Subsection 60A(3): Extra time for do the job outside the house of ordinary working several hours.
  • Subsection 60C(2A): Shift perform allowance.
  • Subsection 60D(3): Overtime and allowance for work on public holidays.
  • Subsection 60D(4): Additional time for perform on holidays on half operating days.
  • Subsection 60J: Termination, lay-off, and retirement gains.

What companies need to do

All businesses will have to have to review their existing work contracts and policies to make sure that they comply with the EA. It should be observed that Area 7 of the EA states that any phrases or disorders which are a lot less favourable to an staff than these supplied under the EA will be void and of no effect. This consists of contracts which were being entered into ahead of 1 September 2022.

(For a extra complete appear at the variations underneath the Amendment Act, browse my earlier posting: “Malaysia Employment Act amendments: 7 essential adjustments for employers to note”)