We need a balanced policy

WE believe that Malaysia tries to stay abreast of global labour trends, striving to create a more equitable and family-friendly work environment.

The latest evidence of these efforts is a significant policy change that extends maternity leave for women to 90 days. This revision, in line with Inter-national Labour Organisation (ILO) standards, is undoubtedly a commendable move. However, a close look at its implications, particularly for micro and small and medium enterprises (MSMEs), reveals there may be cause for concern.

In Malaysia, MSMEs form the backbone of the economy, generating considerable employment opportunities and contributing significantly to GDP. However, they often operate on razor-thin margins. The extended maternity leave policy, while a boon for working mothers, has inadvertently added financial strain to these businesses. They now have to shoulder the additional cost of providing three months’ wages to new mothers, alongside hiring temporary replacements for that period.

The 2023 Budget highlighted some measures to encourage women to return to work after having a child. The most notable of these is the Employment Insurance System Act 2017 amendment to allocate child care grants to women returning to work.

While it’s a praiseworthy initiative, it, unfortunately, does not directly support MSMEs burdened by increased maternity leave costs. It seems the government is eager to meet ILO standards but hasn’t yet found a fully balanced solution to protect the interests of small businesses.

Take Singapore, for example: It has a Government-Paid Mater-nity Leave (GPML) policy. Under GPML, the government funds maternity leave for eligible employees for the first eight weeks for up to two childbirths. For subsequent childbirths, the government funds the entire 16 weeks of maternity leave. Such a policy alleviates the financial burden on employers, particularly smaller businesses, while protecting women’s rights in the workforce.

Of course, comparing Malaysia with wealthier nations like Singapore is not entirely fair. Economies with more robust coffers have the financial flexibility to implement such policies with less strain on businesses. That said, it’s critical to consider these examples as we refine our approach.

The reality remains that many MSMEs in Malaysia are still reeling from the effects of the Covid-19 pandemic. They are desperately trying to recover, and the added cost of the new maternity leave policy might create a stumbling block to their resurgence.

Malaysia’s commitment to ILO standards is admirable and important. However, it’s crucial to ensure that policies supporting this goal are not disproportionately burdening the country’s smallest businesses, the lifeblood of our economy.

In this spirit, it’s vital that the Malaysian government takes a more holistic view, perhaps considering a variant of the GPML policy that provides direct support to businesses, to fully achieve the admirable goal of extended maternity leave.

Ultimately, to better support women in the workforce, we must ensure we are not unintentionally undermining the businesses that employ them. A more nuanced approach, one that balances the needs of working mothers and businesses, is not just desirable but essential for the prosperity of Malaysia.

FAIZ AZIZUL and HAZIMAN ZAKARIA

Entreprenuers and PhD candidates

Faculty of Industrial Management

Universiti Malaysia Pahang