SDSAS stands for Stamp Duty Self-Assessment System.
LHDN has been sending reminder emails that under SDSAS, all stampable instruments must be self-assessed and stamped within 30 days from the date of execution, including employment contract, failing which stamp duty penalties may apply.
Following this, many businesses conducted self-audits and discovered not only that employment contracts were not stamped, but that in many cases, the contracts could not be found at all. This could be because contracts were not issued in the first place, or because predecessor HR didn’t maintain proper records.
As a result, HR teams are now scrambling to prepare new sets of employment contracts, backdating them and distributing them to employees for signing so that the documents can be stamped.
Unsurprisingly, many HR are facing resistance. Employees are feeling sus and reluctant to sign these contracts, especially when they are backdated.
Under the Employment Regulations 1957, a written employment contract should be issued at the latest on the first day of work. Preparing a contract in 2025 and dating it back to 2004 does not fix the issue.
This is my suggestion. Do not backdate the employment contracts.
Instead…
đź“ť Issue a new contract effective today onward, confirming the existing terms and conditions.
đź“ť Include a clause that clearly recognise the employee’s original commencement and continuous service.
Example clause:
Recognition of Commencement Date and Continuous Service
For the avoidance of doubt, the Company acknowledges that the Employee first commence employment on [Original Commencement Date e.g. 1 January 2004]. The Employee’s service with the Company shall be recognised as continuous from this date, notwithstanding the execution date of this Agreement.
This Agreement is issued to set out and govern the terms and conditions of the Employee’s employment with effect from the date of execution herein and shall not be construed as creating a break in service, resetting the Employee’s length of service, or affecting the Employee’s accrued benefits, or statutory entitlements arising from such continuous employment.
Or a shorter version:
Recognition of Continuous Service
The Company acknowledges that the Employee commenced employment with the Company on [Original Commencement Date e.g. 1 January 2024], and the Employee’s service shall be recognised as continuous from that date, notwithstanding the execution date of this Agreement.
Important is recognising tenure is not the same as backdating documents. You can acknowledge 20 years of service without pretending a document existed for 20 years.
High hopes this helps convince employees to sign, so HR can correct course properly.
xoxoxo, AuntyHR
