Employees Who Earn Up To RM 4,000 Are Entitled For Overtime Payments

When the Employment (Amendment) Act 2022 (“the Amendment Act”) was gazetted earlier this year, netizens were overwhelmed with the drastic changes after it had been delayed for ages, especially amid the pandemic.

As the amendments to the Malaysia employment act kick in on 1st January 2023, overtime payments are now available to all employees earning up to RM4,000 a month. Before the amendment, overtime payments were only implemented to employees earning up to RM2,000. The number of hours worked has been decreased to a new weekly limit of 45. Employees who work beyond will be entitled to overtime pay.

What are the factors that employers should consider?

• Review all employee salaries and, taking note of the definition of “wages” explained above, determine which employees fall within the scope of the revised EA and will be entitled to overtime payments.
• Review all existing employment contracts to ensure that the hours of work for all employees are spelled out, and are in line with the working hour limits imposed by the EA. These contractual working hours will be the basis for calculating any overtime payments.
• Ensure that there is a clear policy on overtime or work outside of normal working hours to avoid unnecessary or excessive overtime claims.
• Establish a system for recording overtime work, calculations, and payments These records should be retained for at least six years.

Let’s have a look at some of the key amendments that take effect.

Employers who harass, mislead or threaten an employee for working purposes or who forbid the employee from leaving the workplace might be slapped with a fine of up to RM100,000 up to two years in prison or both.

Also, flexible working hours have been implemented, overtime payments for employees earning up to RM4,000 per month have been increased, and the number of working hours has been reduced from 48 to 45.

Employees can request flexible working hours in written applications, which might include changes to working hours, days of the week, and office location. Within 60 days, the employer must respond to the employee's written request and indicate why it has been rejected.

Source / Image Credit: The Malaysian Lawyer.com , Cheng Co , Bernama