Latest Amendments to Employment Laws

June 2016
by Wong Mei Ying, Yoon Ming Sun, Tan Jun Kit

The information in this article is intended only to provide general information and does not constitute professional advice or legal opinion.

@2018 Chooi & Company + Cheang & Ariff.
All rights reserved.

Amendments to the Employees’ Social Security Act

The Employees’ Social Security (Amendment) Act 2016 (“Amendment Act 2016”), which amended the Employees’ Social Security Act 1969 (“ESSA”), came into force on 1 June 2016. With the amendment, all employees in industries to which the ESSA applies will be insured irrespective of their wages. Prior to the Amendment Act 2016 coming into force, any person whose wages exceeded RM3,000 a month was not insured under the ESSA unless his employer elected to pay contributions to the Social Security Organisation (“SOCSO”).

The employers and employees are required to pay SOCSO contributions at the rates indicated in the ESSA, which are based on the employees’ monthly wages. The monthly wages were capped at RM3,000 for the purposes of determining the SOCSO contributions. Under the Amendment Act 2016, this cap has been increased to RM4,000.

Minimum Wages Order

The Minimum Wages Order 2016 (“MWO 2016”) came into effect on 1 July 2016 and revoked the Minimum Wages Order 2012 (“MWO 2012”). The MWO 2016 is not applicable to a domestic servant.

With the MWO 2016 coming into force, the monthly minimum wages have been increased from RM900 to RM1,000 for an employee in Peninsular Malaysia and from RM800 to RM920 for an employee in Sabah, Sarawak and Federal Territory of Labuan.

Under the MWO 2016, the minimum wages rates payable to an employee shall be as follows: 

Regional areas

Minimum wages rates

Monthly

Daily

Hourly

Peninsular Malaysia

RM1,000

Number of working days in a week

RM4.81

6

RM38.46

5

RM46.15

4

RM57.69

Sabah, Sarawak and Federal Territory of Labuan

RM920

Number of working days in a week

RM4.42

6

RM35.38

5

RM42.46

4

RM53.08

For an employee who is not paid basic wages but is paid wages based on piece rate, tonnage, task, trip or commission, the rate of monthly wages payable to the employee must be not less than RM1,000 per month for an employee in Peninsular Malaysia and not less than RM920 per month for an employee in Sabah, Sarawak and Federal Territory of Labuan.


The information in this article is intended only to provide general information and does not constitute professional advice or legal opinion.

@2018 Chooi & Company + Cheang & Ariff.
All rights reserved.