Flexible Work Arrangements (FWA) Malaysia: Employers Advised Not to Cut Salaries

The Human Resources Ministry supports the Prime Minister’s suggestion for private companies to adopt Flexible Work Arrangements (FWA) as one way to manage current economic challenges, including global supply disruptions.

The ministry said this approach fits today’s fast-changing labour market, where companies need to be more flexible, efficient, and productivity-focused.

What is FWA?

Flexible Work Arrangements (FWA) refer to work systems that give employees more flexibility, such as:

Hybrid work (working from office and home)
Flexible working hours
Other non-fixed working setups

The main goal is to improve productivity while also supporting employee wellbeing.

Benefits of FWA

The ministry explained that FWA can help both employers and employees.

It can:

Improve company efficiency
Support better work-life balance
Increase job satisfaction
Boost productivity

Based on TalentCorp data since 2021:

Over 5,340 companies in Malaysia have adopted FWA
More than 1.6 million workers have benefited

Key findings show:

62% of employers saw higher productivity
70% of employees felt more satisfied
Over 90% of companies reported better engagement
Staff turnover dropped by 15%–20%

No Salary Cuts Due to FWA

The ministry clearly stated that employers should NOT reduce salaries or employee benefits just because FWA is implemented.

Any change in salary is only allowed if there is a new agreement that also changes working hours or job structure.

This is to protect workers’ rights while still allowing companies to adopt flexible work systems.

Improving Digital Skills

The ministry also encouraged employers to strengthen employees’ digital skills to support FWA effectively.

Companies registered under HRD Corp are advised to use training funds to upskill workers in:

Digital tools
Technology usage
Online collaboration platforms

Challenges in FWA Implementation

Monitoring by the Labour Department (JTKSM) and DOSH found several challenges, including:

Work stress and burnout
Poor work-life balance
Social isolation
Communication difficulties

How Employers Can Improve FWA

To ensure FWA works well, employers are advised to:

Manage workload clearly
Communicate with empathy
Set reasonable working hours
Provide mental health support (such as counselling)

Employers can also refer to DOSH’s 2024 Guidelines on Psychosocial Risk Assessment and Management at the Workplace (PRisMA) guidelines for managing workplace psychosocial risks.

Support for Employees

Employees who experience stress or mental health issues can get help through the Heal 15555 hotline under the Ministry of Health.

Conclusion

FWA is becoming an important part of modern working life. It helps companies stay productive while giving employees more flexibility.

However, it must be implemented fairly, without salary cuts, and with proper support systems in place to protect worker wellbeing.

FAQs

Can companies cut salaries when using FWA?

No. Salaries should not be reduced unless there is a new agreement on work terms.

What is FWA?

It is a flexible work system like hybrid work and flexible hours.

Does FWA improve productivity?

Yes. Many companies reported better productivity and employee satisfaction.

What challenges can happen?

Stress, burnout, communication issues, and poor work-life balance.

Where can employees get help?

Through the Heal 15555 hotline for support and counselling.

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