Employees who earn up to RM4,000 now entitled to overtime

PETALING JAYA: A major facelift for the Malaysian workforce is expected as amendments to the Employment Act kick in today.

Most of the amendments are based on the International Labour Organisation (ILO) standards, which will provide a framework to better address labour issues, end unscrupulous workplace practices, and improve workers’ welfare.

Among the key amendments include putting an end to forced labour.

Employers who threaten, deceive or force an employee to work or who prevent an employee from leaving the place of work, can be sentenced to a fine not exceeding RM100,000 or to imprisonment for a term not exceeding two years, or both.

On the employment of foreign workers, employers must obtain prior approval from the Labour director-general before employing such employees.

This approval covered all categories of foreign workers, including expatriates.

If a foreign employee is terminated, the employer must inform the Labour director-general within 30 days, and if the foreign employee absconds from the employment, the employer should inform the director-general within 14 days.

Besides these, there are flexible working arrangements; increase in overtime payments for employees with wages up to RM4,000 per month, and a reduction of working hours from 48 hours to 45.

Employees can submit a written application for flexible working arrangement which can cover changes in working hours, working days and also the place of work.

When such an application is made, the employer must give an answer to the employee, also in writing, whether to agree or reject the application within 60 days, and must give reasons why the application was rejected.

The threshold entitlement for overtime payments has also been raised to cover all employees with wages up to RM4,000 a month.

Pre-amendment, only employees earning up to RM2,000 a month were entitled to overtime payments.

There are also now less maximum working hours of 45 hours a week.

Employees will be entitled to overtime payments if they work beyond the 45 hours provided.

The Labour director-general also has powers now to inquire and determine any disputes and matters relating to discrimination in employment.

The Employment (Amendment) Act was passed in Parliament in March 2022.

The amendments were supposed to come into force on Sept 1, 2022, but was pushed to today to ensure that implementation by employers goes smoothly.