The amendments introduced by the Bill provide that all employees, including expatriates, will be entitled to the minimum standards and benefits under the Act (such as annual leave, sick leave, working hours, rest days, public holidays, maternity and paternity protections, sexual harassment and discrimination protection).

The main changes concern the enhancement of maternity leave to 90 days, the introduction of 3 days of paid paternity leave, the reduction in maximum work hours per day/per week, minimum annual leave entitlement, minimum sick leave entitlement, flexible work arrangements and discrimination complaints. It also prohibits explicitly forced labour. 

More favourable individual and contractual entitlements will, however, prevail on the regulation.

The Ministerial Order of 12 August confirmed the revised scope of the First Schedule of the Employment Act, which expands the definition of an employee as “Any person who has entered into a contract of service", eliminating the previous salary threshold to limit its applicability.

Employers that fail to comply with the provisions of the Act will pay a financial penalty up to a maximum of RM100,000, and a director, manager or officer of a body corporate may be charged jointly or severally for the offences.

Originally, there was no transitional period for these amendments, which entail considerable costs and obligations for employers.

However, the Malaysian Employers Federation has called on the government to delay enforcement, as it is a high cost for employers - estimating it will cost employers nationwide an extra RM110.99 billion per year - and businesses that are already struggling on the back of the pandemic.

In a statement, the federation’s president, Datuk Dr Syed Hussain Syed Husman, said: “Employers generally strive to comply with the statutory requirements, but there were situations where they resigned to the fact that they do not have the financial capacity to do so”.

The effective entry into force of the changes has now been postponed to 1 January 2023 to allow employers to adapt to the changes.