1st September 2022, all employees will be protected by the Employment Act 1955.
In view of the above update, we have gathered some FAQs about the topic and listed them down as follows:
All employees covered by the EA
Question: What is the impact of the EA being applicable to all employees?
Answer: It means that ALL the clauses contained in the EA are applicable (as a minimum standard) to all employees regardless of position and salary.
Hours of work (Maximum 45 hours)
Question: Are break hours considered working hours?
Answer: Break hours can be excluded from the calculation of hours of work if the employee is given freedom during the break. The break must also be at least 30 minutes.
Question: If my tea break is 15 minutes, can I exclude it from the calculation?
Answer: Break hours can be excluded from the calculation of hours of work if the employee is given freedom during the break. The break must also be at least 30 minutes.
Question : Can I still require my employees to work for more than 45hours in a week?
Answer: Yes, the maximum of 45 hours per week refers to normal hours of work. Any work done more than 45 hours will be considered overtime.
Question: What is the maximum overtime limit?
Answer: 104 hours per month.
Maternity (98 days)
Question: When does this come into effect?
Anwer: Only confinements taking place after 1st September benefit from the new provisions.
Question: A female employee is currently on maternity leave of 60 days. Is she entitled to the extension?
Answer: No.
Paternity (7 days)
Question: If the employee has not served for 12 months, is he entitled to paternity leave?
Answer: No. The employee must be in service with the Company for at least 12 months to be entitled to paternity leave.
Question: Will the male employee be entitled to paternity leave if his wife has a miscarriage after 22 weeks of pregnancy?
Answer: Yes, similar to maternity leave, his wife has gone through at least 22 weeks of pregnancy (confinement).
Question: When will paternity leave commence and can it be delayed?
Answer: Based on the wording “confinement”, the paternity leave shall commence from the birth of the child.
Question: Does the 7 consecutive days fall on rest days or public holidays?
Answer: Since the entitlement is 7 consecutive days, it doesn’t matter if it falls on a rest day / public holiday, etc. The entitlement will start to run from the birth of the child for 7 consecutive days thereof.
Special Categories
Only employees earning RM4000 or less in a month will be entitled to:
- Overtime
- Payment for work done on off / rest day
- Payment for work done on public holidays
- Shift allowance
- Termination benefits
Question: How should I determine if my employee earns RM4,000 and below (First Schedule)?
Answer: i. It is based on the definition of wages under s.2 of the Employment Act 1955 which provides that ‘wages’ mean:
Basic wage and all payments for work done in respect of his contract of service but excluding:
- Subsidy for accommodation, food, fuel, light, water or medical attendance
- Pension/provident fund, retirement/retrenchment/termination benefits
- Travelling allowance
- Reimbursement
- Gratuity
- Annual bonus
ii. Under the First Schedule, commission, subsistence allowance and overtime are further excluded for purposes of determining the threshold of RM4000.
Question: What is the calculation for overtime for employees earning below RM4000?
Answer: The same calculation shall apply.
Question: If the employee’s wages are RM3000, do we need to calculate overtime based on this actual wages?
Answer: Yes, the ordinary rate of pay shall be calculated based on RM3000.
Executive level
Question: Salary of previous executive level was over RM2000, and there was no OT. But now the salary has been raised to RM4000 by law, so even if they are at executive level before, they still given OT, right? Can these employees still work flexibly?
Answer: Yes, as long as the monthly salary is less than RM4000, company need to give OT no matter what position they hold.
As for flexible work, all employees can apply. But there are conditions, it needs to depend on the situation, and not all jobs are suitable for flexible work.
Overtime (OT)
Question: The OT of employees under RM4000 can be made up by Annual leave?
Answer: Cannot.
EA or offer letter
Question: The previous rule that employees below RM2000 must follow EA, and employees above RM2001 can follow offer letter is still applicable? Or is it changed to RM4001 or above?
Answer: Changed to RM4000 and above, but some do not apply (please refer to the reference chart below).
Want to know more about starting a Sdn Bhd? What’s the best way to start one, and what should you be mindful of? Register and find out in our upcoming webinar!
Are you ready to form your Sdn Bhd with Malaysia’s #1 award-winning Online Company Secretary? Contact us now via WhatsApp @ 018-7678055!