Employment Law Updates for Malaysian SMEs
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Employment Law Updates for Malaysian SMEs
There have been plenty of updates to the employment law landscape for Malaysia in the past year, and there will be many more coming into effect soon this year.
While there may be some uncertainty in terms of how events (like the fluctuating global economy) will influence the small to medium-sized enterprise (SME) community and related legislation, there are some things we have clarity around as we look to the year ahead.
In this factsheet, we’ll be looking back at the recent developments in employment law from the last 12 months, and forward to what employers need to know for the year ahead. We want to help SMEs understand how the law is evolving in response to current events, to help you stay ahead of the curve this year.
In this factsheet, we’ll be covering;
- Pilot implementation of the Progressive Wage Policy
- Passing of the Trade Union Bill by both Houses of Parliament
- Increase in government’s contribution under the Self-Employment Social Security Scheme (SKSPS)
- Malaysian government exploring the implementation of a National Health Insurance Scheme
- Amendments to the Employment Ordinance in Sabah and Sarawak
- Monthly salary ceiling for Social Security Organisation (SOCSO) contributions increased
- Improved protections for people with AIDS against workplace discrimination
- National Human Resource Policy Framework (2024 – 2030)
We recommend you contact a law firm like PD Legal for further advice on how these employment law updates apply to your specific business situation, or visit the Ministry of Human Resources’ (MOHR) website for more information.
Disclaimer: The information in this factsheet is current as at 25 Jan 2024, and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related bodies corporate (Employment Hero). The views expressed in this factsheet are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice. The Information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising either directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article. You should undertake your own research and to seek professional advice before making any decisions or relying on the information in this factsheet.
What is employment law?
Employment law is the legislation which governs the relationships between employers and employees. Legislation is different in every country, and sometimes varies region to region within countries.
Employment law generally covers (but is not limited to);
- Employment contracts
- Employment types (full-time, part-time, contract, freelance, etc.)
- Hiring and recruitment
- Dismissal and termination of employment
- Occupational health and safety
- Workers’ compensation
- Workers’ rights
- Discrimination in the workplace
- Employee entitlements including annual leave, maternity leave and long service leave, amongst others
Why is it important for businesses to stay on top of employment law updates?
Employment law is always evolving. As society, and consequently the needs of employers and employees, change – so too must employment legislation.
Sometimes these changes will come in the form of amendments or reforms to legislation, sometimes important requirements will be changed to processes that affect businesses, sometimes statutory rates of pay or contributions will be amended, and sometimes new precedents will be set by cases seen in the court.
This can have a range of impacts on businesses. For example, if statutory rates of pay have changed but you have not updated your payroll, you could be at risk of non-compliance. If you’re not up to date with the latest rules around leave entitlements, your employees may be justified in making a complaint.
To make matters more complex, different employment law updates will affect different businesses in different ways. That’s why we always recommend not only keeping track of employment law updates, but seeking professional advice for your personal situation from a qualified employment lawyer.
Looking for more information about payroll in Malaysia? Download our guide to the basics of payroll in Malaysia now!
How often does employment law change?
In a word – constantly. Like the rest of the legal system, employment law is constantly evolving, being amended and being updated.
A country’s law and policy-makers are always looking for ways to improve legislation and employment rules, in line with emerging needs or current events. As stated above, there are many legal changes happening at any one time, for any number of reasons.
We created our Employment Law Updates Factsheets to alert you seasonally to changes both current and upcoming, so feel free to check back on this page each quarter to stay up to date.
We know that it’s especially challenging as an SME leader, who doesn’t have the luxury of an in-house legal team or an expansive HR and administrative team to stay on top of these updates. We want to support you so that you can feel ahead of the curve when it comes to employment law, and future-proof your business in line with emerging legislation.
It’s all part of our commitment to making employment easier and more rewarding for everyone.
The Employment Act is the main piece of legislation governing employment in Malaysia. Want to learn more about this? Download our Guide to the Employment Act (1955) or visit our Malaysia SME BizHub now.
Should your business get help from employment law experts?
100%. This Employment Law Updates Factsheet is general in nature and does not speak to your specific situation. The views expressed in this article are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice.
There are a thousand variables when it comes to the application of business and employment law compliance. This can include the industry your business is in, the number of employees you have, the location of your business – and so much more.
Our factsheets can provide a great point of reference for new or upcoming employment law updates. You might use these to kick-start discussions with your legal expert, or to seek further personalised advice on how these updates will impact your business.
Want a more basic overview of HR compliance? Download our free guide to HR compliance in Malaysia.
How can Employment Hero help you stay compliant with employment law?
Employment Hero’s advanced (but easy-to-use) HR and payroll platforms have been purpose built by employment experts for the needs of SMEs.
Our features are here to help you stay compliant with employment laws. Just a few of the ways in which our best-in-class platform can help include;
- A library of HR policies created by employment experts which you can easily customise, issue for acknowledgement by your team, and update
- Certification management, with cloud-based storage of your team’s certifications and qualifications that are necessary for them to complete their role
- Digital employment contracts which are stored on the cloud and easily accessible from your employees’ mobile app
- Time and attendance tools, helping you and your team keep track of their working hours
- Payroll reporting and contribution calculation; our payroll platform is LHDN approved to help you complete payroll correctly
- Automated pay runs and pay slips, to help you with payroll admin and reduce human error
Get the latest employment law updates
Ready to learn more about the latest updates to employment law? Download our free factsheet now by filling in the form on the right.
The smarter way to manage your payroll, people and productivity. For Malaysian small and medium businesses on the up.
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