Malaysia Employment Law Updates as of 25th October 2017

Malaysia Employment Law Updates as of 25th October 2017

  1. Employment Insurance Scheme (EIS) Bill 2017:
    • Tabled on 1 August 2017. Now deferred to the next reading on October 2017.
    • Provides for post-exit benefits and re-employment assistance.
    • Percentage of wages can be claimed for up to 6 months of unemployment for job search. Other claims include for early re-employment, reduced income and career counselling and training.
    • EIS will be administered by SOCSO. The EIS contribution is approximately 1.5% of monthly wages. Employee and employer contributes 50% each. Subject to a maximum wage cap of RM 4,000.
    • Penalty for non-compliance: Fine of a maximum RM 10,000 or 2 years’ imprisonment maximum, or both.

  2. Management of foreign workers
    The existing laws for the protection of the welfare of foreign workers will be broadened to cover all sectors.Penalties for the following breaches will be introduced:

    • retaining foreign workers’ passports;
    • failing to inform the foreign workers of their right to retain their passports, to provide access to their passports or to provide information on how to report violations of such rights;
    • failing to provide secure facilities for the storage and safekeeping of passports and other valuables
    • substituting or altering the workers’ employment contract, for example through reduction of salary, extension of contract duration, and so forth; and
    • payment of government levies for foreign workers by employers (Note that employers to bear levy payments for foreign workers from January 2018)

  3. Anti-discrimination
    • Except for the Persons with Disabilities Act, Malaysia has no employment anti-discrimination laws.
    • The Employment Act provides for certain restrictions relating to the employment of women.
    • Possibility of additional protections from discrimination?

  4. Unionism
    • Liberalization of conditions relating to strikes and allowing peaceful strikes.
    • Union membership and representation will continue past termination of employment.
    • Removal of trade union leadership restrictions, including those in respect of non-Malaysians.

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