Employment Act to apply to all employees from 1 September 2022, some sections subject to increased salary threshold of RM4,000/month

When the Employment (Modification) Act 2022 (“the Modification Act”) was gazetted previously this calendar year, there was significantly confusion about what the scope of the Employment Act (“EA”) would be the moment the Amendment Act arrived into force. This confusion was fuelled by the governing administration not amending the Initially Routine at the identical time the Modification Act was handed, and also frequently stating that the EA’s scope would be expanded so that all employees irrespective of income would be entitled to the EA benefits and protections, with a lot of business professionals sharing the watch that these types of a blanket enlargement would be impractical for lots of motives.

With the gazetting of the Employment (Modification of First Schedule) Get 2022 (“First Timetable Modification Order”) on 15 August 2022, there last but not least is clarity on the scope of the EA from 1 September 2022.

EA salary threshold enhanced from RM2,000 to RM4,000

Prior to the new amendments, the vast vast majority of the EA only applied to personnel earning up to RM2,000/thirty day period, or to specified teams of personnel irrespective of wages (e.g. individuals engaged in or supervising handbook labour, and many other groups). The current EA established out particular provisions to help non-EA staff to also be integrated in the sections of the EA concerning maternity security (Section IX) and sexual harassment (Section XVA).

Subsequent the Initial Routine Modification Buy which will arrive into pressure on 1 September 2022, the way the EA scope is described has been reversed. When it formerly only applied to employees earning up to RM2,000/month with some certain sections applying to all workers, it will now implement to all workers irrespective of wages, with some certain sections not applying to employees earning far more than RM4,000/thirty day period. In this article are the information:

  1. The EA will now utilize to “any man or woman who has entered into a contract of service”.
  2. Nevertheless, the sections of the EA in relation to extra time payments and termination gains will not apply to staff whose wages exceed RM4,000/thirty day period (the complete list of excluded EA provisions is detailed down below).
  3. The listing of EA provisions which do not utilize to domestic staff members (beforehand regarded as domestic servants) has also been expanded.

This is the whole checklist of EA provisions which will not utilize to staff earning additional than RM4,000/thirty day period:

  • Subsection 60(3): Time beyond regulation for operate on relaxation times.
  • Subsection 60A(3): Time beyond regulation for function exterior of ordinary performing several hours.
  • Subsection 60C(2A): Change work allowance.
  • Subsection 60D(3): Time beyond regulation and allowance for operate on public holiday seasons.
  • Subsection 60D(4): Extra time for perform on holidays on half doing work days.
  • Subsection 60J: Termination, lay-off, and retirement positive aspects.

What employers want to do

All companies will have to have to overview their present employment contracts and policies to be certain that they comply with the EA. It should be observed that Portion 7 of the EA states that any terms or conditions which are less favourable to an staff than all those presented below the EA will be void and of no result. This involves contracts which were entered into ahead of 1 September 2022.

(For a more comprehensive look at the changes less than the Modification Act, study my previously write-up: “Malaysia Work Act amendments: 7 essential improvements for employers to note”)