Who is Covered by the Employment Act 1955?
Originally, the EA 1955 primarily covered employees earning less than RM2,000 per month and those engaged in manual labor. However, significant amendments that came into effect on January 1, 2023, expanded its scope. Now, the Act generally covers any employee who has entered into a contract of service, regardless of their wages. It's important to note that while the Act's broad principles apply to all, certain specific provisions (like detailed overtime pay rates or termination benefits) may not apply to employees whose wages exceed RM4,000 a month, unless the nature of their job falls within specific categories outlined in the Act.
Your Key Rights and Protections Under the EA 1955
1. Fair Contract Terms and Timely Wage Payment
Your employment contract is a fundamental document. The EA 1955 stipulates that contracts must clearly outline your job description, nature of work, compensation package, benefits, and termination clauses. Employers are legally required to pay your wages and salaries by the 7th day after the last wage period. Your payslip should clearly detail all components of your earnings and any statutory deductions.
2. Standard Working Hours and Overtime Pay
The Act sets clear limits on your working hours to promote a healthy work-life balance:
- Standard Hours: Typically eight hours per day, not exceeding 45 hours per week.
- Rest Day: You are entitled to a paid rest day every week, usually determined by your employer.
- Overtime: Any work performed outside your official regular hours is considered overtime.
- Overtime Rates:
- Normal Working Days: Not less than 1.5 times your regular hourly wage.
- Rest Days: Not less than 2 times your hourly wage.
- Public Holidays: Not less than 3 times your hourly wage.
These specific overtime rates primarily apply to employees earning less than RM2,000 per month or those engaged in manual labor. Special provisions also extend to employees earning up to RM4,000 per month.
3. Mandatory Statutory Contributions
Your employer is legally required to make specific contributions on your behalf to crucial social security schemes, which are also deducted from your salary. These include:
- Employees Provident Fund (EPF / KWSP): Your retirement savings fund. Both you (11%) and your employer (12-13%) contribute. EPF funds can also be used for housing, education, and PTPTN loan repayment.
- Social Security Organization (SOCSO / PERKESO): Provides protection against work-related injuries, invalidity, and occupational diseases. Both you (0.75%) and your employer (1.75%) contribute.
- Employment Insurance System (EIS / SIP): Offers financial assistance and job search support if you unexpectedly lose your job. Both you (0.2%) and your employer (0.2%) contribute.
These contributions are vital investments in your long-term financial security and provide essential safety nets.
4. Leave Entitlements
The EA 1955 provides comprehensive provisions for various types of leave, ensuring you have time to rest, rejuvenate, and attend to personal matters:
- Paid Annual Leave: The number of days depends on your length of service:
- Less than 2 years of service: At least 8 days per year.
- Between 2 and 5 years of service: At least 12 days per year.
- Over 5 years of service: At least 16 days per year.
- Paid Sick Leave: Entitlement varies based on service length, if certified by a medical practitioner:
- Less than 2 years of service: Up to 14 days per year.
- Between 2 and 5 years of service: Up to 18 days per year.
- More than 5 years of service: Up to 22 days per year.
- Maternity Leave: Eligible female employees are entitled to 98 consecutive days of paid maternity leave. Employers are prohibited from terminating a female employee during her pregnancy or maternity leave, except in extreme cases like misconduct or business closure.
- Paternity Leave: Eligible married male employees are entitled to 7 consecutive days of paid paternity leave for each childbirth (up to a maximum of 5 occurrences).
- Public Holidays: You are entitled to paid public holidays as gazetted.
- Other Leave: The Act also provides for other forms of leave such as hospitalization leave and compassionate leave, which may be detailed in your employment contract.
5. Protection Against Unfair Dismissal
You cannot be terminated without "just cause or excuse." This means employers must have a valid and substantial reason for dismissal (e.g., misconduct, poor performance, redundancy) and must follow fair procedures, including conducting a "due inquiry" for misconduct cases. If you believe you've been unfairly dismissed, you have the right to challenge it under the Industrial Relations Act 1967 (IRA 1967) by filing a complaint with the Industrial Relations Department within 60 days of your dismissal.
6. Non-Discrimination and Safe Workplace
Malaysian employment laws prohibit discrimination based on race, gender, age, disability, and other protected attributes in hiring practices and workplace policies. You also have the right to a safe working environment and access to grievance mechanisms should disputes arise. Employers are required to maintain accurate records of your wages and employment-related documents for a minimum of five years.
Why Understanding Your Rights Matters
Being knowledgeable about the EA 1955 empowers you in several ways:
- Ensuring Fair Treatment: You can verify that your employer is complying with legal standards regarding your pay, hours, and benefits.
- Financial Security: Understanding statutory contributions and leave entitlements helps you plan your finances and utilize available safety nets.
- Advocating for Yourself: Knowing your rights strengthens your position during discussions about your employment terms or if you need to raise a grievance.
- Informed Career Decisions: A clear understanding of legal protections helps you assess job offers and navigate career changes with confidence.
Conclusion
The Malaysian Employment Act 1955 is your fundamental safeguard in the workplace. By understanding its comprehensive provisions on working hours, wages, statutory contributions, leave entitlements, and protection against unfair dismissal, you empower yourself to navigate your professional life with confidence and security. Always stay informed about your rights, and if you ever feel they are being violated, remember that legal avenues are available to seek redress and ensure fair treatment.