Notably, a handful of global corporations have switched to full remote work as they believe this change had provided a critical booster shot for productivity. Notably, some in Big Tech are now in full hybrid operations or cutting back on remote working policies completely eventhough most originally rolled out full-remote work mandates.

In Malaysia’s case, flexible working arrangement is now provided and observed under the country’s Employment Act. This new inclusion, which is part of an extensive list of highly anticipated amendments that have been passed in the Employment (Amendment) Bill 2021, is focused on improving protection that this critical Act offers to all Malaysian employees.

After multiple deliberations with industry groups and consortiums; key vertical leaders from the private sector; and various rights protection groups, these critical updates – now called the Employment (Amendment) Act 2022 – have already gone into effect on 1 January 2023. It had been pushed to this new date from its original 1 September 2022 deadline.

While there are many related aspects to flexible working arrangements, what must human resources (HR) and management also focus on from the Employment Act 1955 amendments?

More importantly, are their HR functions already optimised and fully compliant with these amendments?

New Employee Priorities in the Digital Era Flexible Work is a Must-Have

Over the last two years, the flexible working arrangements trend had been a major talking point among HR, management, and the workforce. In fact, it became a central theme for businesses due to various economic restrictions that the recent COVID-19 pandemic brought about. As a result, not only did this workplace mode became the only option that can ensure business-as-usual operations, but it also somehow became the de-facto standard for proper work-life balance.

While some businesses are adapting to this new norm, most prefer to get back to being fully operational without such an option. In contrast, governments around the world are in favour of the workforce and have begun to implement regulation that support this growth trend.

Malaysia is one such country as it moved to include flexible working arrangements as part of the new amendments for its Employment Act 1955. With this update, the Act specifically addresses the growing demand for remote and hybrid work options and newer workplace practices, such as managing mental health, improving employee privacy, and introducing sustainable work processes.

Notably, the Malaysian Ministry of Human Resources recently confirmed that this provision will not be strictly mandated. Instead, specific incentives will be given to businesses that comply and enable staff to manage their work times so long as they meet the required number of working hours.

With the amendments to Malaysia’s Employment Act 1955, employees can apply in writing to request for flexible work arrangements and management must respond within 60-days.

Considering how these compliances and workplace options must be included in HR workflows, it is critical that proper systems must be in place. This is so HR teams can process flexible work requests, manage expectations of existing personnel, and be ready for new recruits.

Raising the Inclusivity Bar

Based on key 2022 workforce trends, which still have a huge influence in the workplace over the coming months, boosting employee engagement and workforce inclusivity is a must. This can be achieved via providing customised performance management within the workplace, carrying out regular surveys among the staff, and showing appreciation to employees who have done great work.

These three major pillars – in some ways – are central to the highly anticipated amendments for Malaysia’s Employment Act 1955. Before these changes have been passed, the original regulation only applied to those receiving RM2,000 and below per month. The update in the First Schedule of the Act now extends to all employees, regardless of the salary range.

This also includes those working in the Gig Economy as the amendments also state that there is a presumption of employment so long as there is control over work demands, times, and responsibilities that must be delivered. As such, even ride-hailing riders and drivers, freelancers, and data entry teams who work from home at specific times and rates are now protected under the Act.

With this one change, the entire workforce is now fully protected under Malaysia's Employment Act 1955 and can use it to address management-personnel disputes. This includes non-payment of salaries; missing deductions from income tax and provident fund payments; and abuse of overtime hours and rates.

The move clearly drives home the fact that inclusivity is now critical. As such, the entire Malaysian workforce is now fully protected under this updated Act. As it is important for businesses to comply with these new regulations, the best way to do this is via fast-tracking digital transformation efforts.

Boosting Workforce Well-Being and Sustainability

Aside from expanding Employment Act 1955 to cover the entire Malaysian workforce, the new amendments also focus on supporting parents. For mothers, the paid maternity leave has increased from 60-days to 98-days. As for fathers, they now can apply up to seven days of paid paternity leave. These updates are enshrined in Section 37 and 60 of Part IX within the Malaysia’s Employment Act 1955.

There is also a provision that now enforces the maximum work time for employees to be set at 45-hours per week, instead of 48-hours. This is in line with what the International Labour Organisation (ILO) is pushing for as it works to protect the welfare of employees and also reinforce the need to improve work-life balance and the overall well-being of the workforce.

Other notable updates include increasing sick and hospitalisation leaves; boosting awareness at the workplace for discriminatory practices and sexual harassment; and improving protections for pregnant mothers against termination. These changes will raise the bar for worker rights and have already pushed management and HR teams to review their employment terms and policies.

Being Constantly Ready

The 2022 amendments in Malaysia’s Employment Act 1955 are some of the biggest updates in decades and, when first announced, have sent businesses into a tailspin panic as they scramble to ensure they are fully compliant. While there are calls to extend the implementation of these long-awaited updates, Malaysia already moved forward to rollout these amendments on 1 January 2023.

At The Access Group, we strive to provide clients and partners with digital solutions that is constantly updated and consistently focused on ensuring compliance. In fact, these changes to Malaysia’s Employment Act are already included in the latest updates for all our available HR platforms and services. After all, the goal is to set up your business and HR teams for success and that includes ensuring maximum and consistent compliance to current and new regulations.