Littler Global Guide - Malaysia - Q4 2022

Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

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Employment (Amendment) Act 2021 Coming into Force on January 1, 2023

New Legislation Enacted

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

The Employment (Amendment) Act 2021, which was passed on March 30, 2022, becomes effective on January 1, 2023.

By way of a Ministerial Order, it has been announced that all provisions of the Employment Act 1955, including the amendments passed by the Employment (Amendment) Act 2021 will apply to all employees regardless of their wages. However, entitlement to overtime pay, holiday pay, allowance for shift work and termination, lay-off and retirement benefits is limited to only employees (i) who earn monthly wages of RM4,000 or below; or (ii) regardless of wages, employees who are engaged in or supervise manual labor or in the operation of maintenance of any mechanically propelled vehicle operated for the transport of passengers or goods or for commercial purposes.

Increase in Minimum Wage for Employers with Less than Five Employees Deferred

New Legislation Enacted

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

The Minister of Human Resources has announced that implementation of the increase in minimum wages of employees from RM1,200 to RM1,500 per month for employers who employ less than five employees has been deferred from January 1, 2023 to July 1, 2023. The increase in monthly wages of employees from RM1,200 to RM1,500 for employers who (i) employ five or more employees, or (ii) carry out a professional activity classified under the Malaysia Standard Classification of Occupations (MASCO) regardless of the number of employees employed, had been implemented since May 1, 2022.

The amendments to give effect to the abovementioned deferment are set out in the Minimum Wages (Amendment) (No.2) Order 2022 that was published on the official gazette on December 28, 2022.

Test for Vicarious Liability Where Employees Commit Intentional Wrong

Precedential Decision by Judiciary or Regulatory Agency

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

The test for vicarious liability in Malaysia is the “close connection” test following the decision of GMP Kaisar Security (M) Sdn Bhd v Mohamad Amirul Amin Bin Mohamed Amir [2022] MLJU 2661, in which the Federal Court (apex court) has laid down four common denominators underpinning the scope of vicarious liability where an employee had committed an intentional wrong: (i) The intentional wrong is committed in the course of employment; (ii) there must be a connection between the wrongful act and the nature of the employment; (iii) the nature of the employment is such that the public at large are exposed to the risk of physical or proprietary harm; and (iv) the risk is created by the employer by virtue of the features of the business.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.