MEF: Govt should help bear maternity leave cost

PETALING JAYA: The government should share the burden of funding female employees’ maternity leave instead of passing this fully to the bosses when it raises the benefit to 90 days from 60 days beginning 2021, says the Malaysian Employers Federation (MEF).

Its executive director Datuk Shamsuddin Bardan said a company would incur RM3bil a year in additional cost from the increase in maternity leave.

“It will not be much of an issue for big companies but it will be a great challenge for small companies, ” he said, adding that out of one million registered and active employers nationwide, 98% of them were small and medium enterprises (SMEs).

“Out of these SMEs, 60% are micro employers with less than five staff and there are 650,000 of them. Imagine when one or two of the staff go on maternity leave, it will be a real challenge for them.

“That’s why the government owes a duty to share part of the burden. They should also pay the maternity leave provision, ” he said.

The announcement to increase maternity leave from 60 days currently to 90 days in 2021 was made under Budget 2020

Shamsuddin said many Asian countries had social security payment so that employers were not fully burdened by maternity leave cost.

“In Singapore, for example, when they increased the maternity leave from 60 to 84 days, the government foot the cost from the 61st to the 84th day for the first two births.

“And the government also bears the full maternity costs for the third and fourth births, ” he said.

Alternatively, he said the government could look into female workers’ social security protection, especially the Employment Insurance System (EIS) benefit where part of the quid pro quo was for this to also bear the cost of maternity leave.

Federation of Malaysian Manufacturers (FMM) president Datuk Soh Tian Lai also called on the government to consider covering the cost of the extra days.

“In many countries, the extra days are covered by the government. This should be something that the government considers, ” he said.

Soh said although FMM was fine with increasing the maternity leave, the concern was about the financial impact if the benefit was not limited to the number of children.

“It should be limited to four surviving children.

“In other words, 360 days similar to the quantum adopted by the

public sector versus 450 days for five surviving children as proposed in Budget 2020 for the private sector.

“This would keep the implementation cost to a minimal for employers, ” he said.

Bukit Gasing assemblyman Rajiv Rishyakaran also called on the government to expand the social security coverage to cover maternity leave.

“The federal government should consider ways to socialise the implementation of increasing maternity leave to cushion the impact on employers.

“One way is to expand the Socso coverage to cover maternity leave. Maternity leave is a social goal and benefits society and country, not businesses.

“Thus socialising its cost should be the way forward, ” he said in a statement yesterday.