Prior to this, the Employment Act 1955 only protected employees who received monthly salaries of RM2,000 and below. With the recent amendment, the Act will now cover all Malaysian employees – no matter how much they are being paid. However, those earning above RM4,000 per month are exempted from certain provisions like overtime pay, which made us ask the question: how are Malaysian organizations managing and responding to this?
While the government may have intended to improve the livelihoods of employees through this amendment, the additional cost of managing overtime pay can be a burden to employers, especially those with a large bench of workers. From the employees’ point of view, overtime pay can provide extra income, but it can also result in heavier workloads and lead to longer working hours, which can be harmful to overall mental and physical health in the long run.
What employers can do is look into ways to increase productivity without needing to extend working hours. One approach is to adopt new technologies and augment their workforce capabilities. With the pace of technological advancements, there are newer and more improved productivity tools being introduced regularly, and employers need to consider investing in these tools to enhance workplace productivity. When used effectively, these tools can reduce time and costs spent on business operations, without compromising on quality or employee wellbeing.
Interestingly enough, 31% of the 704 respondents on our LinkedIn poll shared that their organizations have yet to take any action. On that note, we need to mention here that this poll was conducted at end February, merely two months since the Act was amended. It is therefore likely that this number will be lower by the time you read this article. Another important consideration is communication, as it is also likely that the changes were implemented within the organization but not communicated to the employee, which may rationalize the data we are seeing here.
41% said that their organizations are now paying overtime pay for eligible employees, 15% said that salaries have been bumped up to more than RM4,000, while 13% said that their organizations have done both – raise salaries and pay overtime to their employees.
#OTRamblings #EA1955 #BebelBimbo
