PETALING JAYA: While the new Employment Act rules are set to kick off next month, more businesses are asking for additional time and a step-by-step implementation to provide a soft landing amid the economic recovery.
Small and Medium Enterprises Association of Malaysia chairman Datuk William Ng proposed SMEs be given at least a year so that they could align their internal processes and staffing.
The new rules to be enforced from Sept 1 include the reduction of maximum working hours per week from 48 to 45, increases in maternity and paternity leave, the implementation of a flexible working arrangement (FWA) and increased penalties for businesses that are found to have breached the Act.
Ng said one of the key challenges would be the FWA.
“Our stand remains that this should be a private arrangement between employers and employees.
“Many SMEs are already transitioning into some form of FWA, but making it mandatory would add an unnecessary hurdle to our recovery.
“The longer maternity leave could have been better supported such as via co-paying of the leave by the government as practised in Singapore, or to tier it so that it is 98 days for the first two children and 60 days for the third and fourth,” he said when contacted.
Ng said the association was supportive of the changes, but hoped the government would take a stepped approach in enforcing the rules.
SME Association of Malaysia president Ding Hong Sing said the amendments should be implemented “step by step” as it could kill the economy’s recovery.
He said companies were still reeling from the imposition of the new minimum wage of RM1,500 since May 1, which contributed to a 25% to 35% increase in monthly operating costs.
“With the new rules set to take effect next month, the prices of goods will surely increase,” he added.
Ding also said with the new 45-hour work week, a company’s output would be reduced.
“Developed countries such as Singapore cannot be used as an example to justify the reduction of weekly working hours.
“This is because our standard and output is not as high as Singapore and European countries.
“Their output is very high as manufacturing is highly automated,” he said, adding that the government should wait until the economy and the ringgit were performing better.
As for the additional maternity leave for private sector employees, Ding said it would add extra cost for SMEs that would have to hire a temporary worker.
“The cost would be even higher if the company is to hire a replacement worker with a lot of experience,” he added, proposing the government foot the bill for the extra 38 days of maternity leave.
Industries Unite also said it was not the time to implement the amendments to the Act as businesses were just recovering.
“The process of recovery is severely handicapped by inadequate workers, both local and foreign, leading to extreme costly overtime compounded by the hike in minimum wage.
“Inflation is also causing additional cost and limiting consumer spending,” said its representatives Tan Sri Teo Chiang Kok and Datuk Irwin SW Cheong.
Industries Unite represents 120 trade associations and chambers of commerce from mid-tier, small businesses and micro-entrepreneurs.
