Akta Kerja 1955 (Pindaan) 2022: What Malaysian Employers Must Know

The Akta Kerja 1955 (Pindaan) 2022 has introduced major changes to employment law in Malaysia.

For employers, recruiters, and HR professionals in the private sector, this amendment is mandatory from 1 January 2023.

The updates are meant to modernise labour practices, expand protection for workers, and align Malaysia’s labour laws with international standards.

What is the Main Objective of Akta Kerja 1955 (Pindaan) 2022?

The amendments aim to improve the welfare of workers in Malaysia.

At the same time, it brings local labour standards closer to international benchmarks like those set by the International Labour Organization (ILO).

These changes also support Malaysia’s position when negotiating trade agreements that include minimum labour standards.

What Are the Key Highlights of the Amendments?

Several significant updates were introduced:

The Act now covers all employees, regardless of salary.
Maternity leave increased from 60 to 98 days.
Paternity leave has been introduced for 7 days.
Weekly working hours reduced from 48 to 45.
Hospitalisation leave is now separate from normal sick leave.
Employees can request flexible work arrangements in writing.
Stronger provisions on sexual harassment, forced labour, and discrimination.
Contractors must provide written contracts.
New penalties up to RM50,000 for non-compliance.

When Did the Amendments Come into Effect?

The Employment Act amendments officially took effect on 1 January 2023.

All employers are required to comply starting from that date. This includes updating employment contracts and HR policies.

Do All Employers Need to Implement the Changes Immediately?

Yes. There is no grace period.

The amendments apply to all private sector employers in Peninsular Malaysia and Labuan.

Sabah and Sarawak are still governed under their respective labour ordinances until further updates.

Whether you run a small business or a large organisation, the responsibilities under the new law apply equally.

For SMEs, this means adjusting working hours, benefits, and documentation to comply.

Who Is Now Protected Under the Amended Act?

Previously, the Act applied only to those earning RM2,000 or less per month and certain categories of manual labour.

Now, the protection has been expanded to all employees, regardless of salary.

However, overtime pay, rest day pay, and termination benefits are still only mandatory for:

Employees earning RM4,000 and below, or
Manual workers and those supervising them, regardless of salary

So yes, your higher-income employees are now covered under the Act, but some benefits still depend on income thresholds.

Working Hours Regulations

Under the amendment, the maximum working hours per week are now 45 hours. This does not include break times, so employers must adjust shift patterns accordingly.

You can manage the 45-hour week by:

Reducing daily work hours across 6 days
Changing to a 5-day work week
Starting shifts later or ending earlier

However, you cannot reduce salaries because of this change.

Under the existing Employment Act, employees are entitled to at least one rest day per week. This remains unchanged under the 2022 amendments.

Employees covered under the Act, especially those earning RM4,000 and below or involved in manual work, remain entitled to rest day and public holiday pay if required to work. These payment protections were not removed under the 2022 amendments.

Leave Entitlements

Several changes were introduced to leave policies:

Maternity Leave: Increased from 60 to 98 consecutive days. Applies to all female employees, regardless of income level.
Paternity Leave: 7 consecutive days for married male employees, up to 5 births. They must have worked for at least 12 months with the employer.
Sick Leave: The total now includes both ordinary sick leave and hospitalisation leave, which are counted separately:
- Less than 2 years: 14 sick + 60 hospital = 74 days
- 2–5 years: 18 sick + 60 hospital = 78 days
- More than 5 years: 22 sick + 60 hospital = 82 days

Calculation of Wages for Incomplete Months

The Act now introduces a formula to compute wages for incomplete months (e.g., employee joins mid-month, resigns early, or takes unpaid leave):

(Monthly Salary / Number of Days in Pay Period) x Number of Eligible Days

This uses calendar days, not working days, to determine the final amount.

Flexible Work Arrangements (FWA)

Employees now have the right to request flexible working arrangements. They can apply to change:

Work hours
Work days
Work location

The request must be made in writing. Employers must respond within 60 days, in writing, with reasons if rejected. FWA does not affect annual leave or rest day entitlements.

Presumption of Employment Relationship

If there is no written contract, the Act presumes someone is an employee based on:

Whether the person follows your instructions or schedule
Uses your equipment
Works for your business, for your benefit
Is paid regularly and depends on it for income

If any of these apply, you must treat the individual as an employee under the law.

Hiring of Foreign Workers

Before hiring a foreign worker, employers must now get prior approval from the Director General of Labour (JTKSM). This will only be granted if you have no pending cases or previous violations under labour laws.

You must also report:

If the foreign worker resigns or goes missing (within 14 days)
If you terminate them or their permit expires (within 30 days)

Penalties for hiring without approval: Up to RM100,000 or 5 years jail (or both).

Protection Against Dismissal for Pregnant Women

You cannot terminate a pregnant employee or one on maternity leave, unless:

She has breached her contract
Committed misconduct
Or your company is shutting down

Even if she agrees to return early from maternity leave, you are not allowed to instruct her to do so. The decision must come from her, with medical clearance.

Notice on Sexual Harassment

As of 1 January 2023, all employers are required to display a notice on sexual harassment in visible areas of the workplace. This can include reminders like:

"Stop Sexual Harassment"
"Sexual Harassment Is a Crime"

You must post these notices in places such as time-clock areas, break rooms, or meeting rooms.

Beyond notice display, employers should also be ready to handle complaints seriously. This includes creating a channel for complaints, investigating reports promptly, and creating a safe and respectful environment for all employees.

FAQ

Do the amendments apply to all sectors?

They apply to all private sector employers in Peninsular Malaysia and Labuan.

How should SMEs comply with the new rules?

Update contracts, align working hours, and train HR or payroll teams based on the new leave, pay, and working hour rules.

What happens if employers don’t comply with the amendments?

You may be fined up to RM50,000 for violating the Act. Some offences also include jail time.

Can an employer still terminate a pregnant employee?

Only under special conditions, such as misconduct, breach of contract, or closure of the business.

What’s the process to approve flexible work arrangements?

Employees must submit written requests. You must reply in writing within 60 days and explain if the request is declined.

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