‘Defer amendments to Employment Act’

PETALING JAYA: The Employment Act amendments scheduled to be introduced on Sept 1 should be put off until businesses are able to fully recover, says the Master Builders Association of Malaysia (MBAM).

Its president, Oliver Wee Hiang Chyn, stated that the construction industry will struggle to accommodate the additional costs incurred as a result of the Employment Act 1995 change, claiming that such costs were not budgeted for by contractors.

“The construction industry continues to deal with uncertain liabilities resulting from the Covid-19 pandemic and requires extensive time to fully recover their businesses.

“It is vital that the amendments be enforced at a later period to avoid any further additional costs of doing business,” he said in a statement.

Wee said the effects of the new minimum wage of RM1,500 would also be detrimental to the industry as employers would have to fork out more to keep their businesses running.

Despite operating at full force during the country’s transition to an endemic phase, manpower challenges have hampered the industry’s recovery process, he said, adding that this has resulted in project delays.

“The government should also look into a proper economic recovery plan for the industry,” he said.

Under labour amendments to take effect on Sept 1, there will be flexible working arrangements; an increase in overtime costs for employees with wages up to RM4,000 per month; a reduction of working hours from 48 hours to 45; 60 days of hospitalisation leave per year in addition to non-hospitalisation sick leave; an increase in maternity leave from 60 days to 98; and paternity leave of seven continuous days per birth.

Previously, several groups called on the government to delay the implementation of the changes, citing various reasons, including cost.

Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said the amendments would see employers absorb an estimated additional cost of RM110.99bil per year, which was very challenging due to the adverse effects of Covid-19.

SME Association of Malaysia president Ding Hong Sing called for the amendments to be implemented “step by step”.

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.

The Federation of Malaysian Business Association (FMBA) said the enforcement of the amendments will lead to increases in the price of goods and services as employers will have to allocate more resources to hiring and paying workers.