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Employers! Are You Ready With These HR Changes Effective 1 January 2023?


Our Human Resource Minister has recently declared that the Employment (Amendment) Act 2022 with these HR changes effective 1 January 2023. It was earlier announced to take effect from 1 September 2022 but was then postponed.

What Are The HR Changes Effective 1 January 2023?

Among them are:

1) Amendment of Section 37 – Maternity allowance increased from 60 consecutive days to 98 consecutive days.

2) New Section 41A – Restriction on termination of pregnant female employee unless due to wilful breach of a condition of the contract of service under subsection 13(2); misconduct under subsection 14(1); or closure of the employer’s business. (2) Where the service of a female employee under subsection (1) is terminated, the burden of providing that such termination is not on the ground of her pregnancy, shall rest on the employer.

3) Amendment of section 60A – in subsection (1), by substituting for the word “forty-eight” wherever the word “forty-five” appears – to reduce work hours in a week.

4) New Section 60FA – Paternity Leave – a married male employee shall be entitled to a paid paternity leave at ordinary rate of pay for a period of seven consecutive days in respect of each confinement. The paternity leave under subsection (1) shall be restricted to five confinements irrespective of the number of spouses.

Read: Managing Mental Health in the Workplace

5) New Part XIIc – Flexible Working Arrangement – anything contained in the contract of service, an employee may apply to an employer for a flexible working arrangement to vary the hours of work, days of work or place of work, in relation to his employment. The employee must apply in writing. Employer may reply within 60 days from the date such application is received, to approve, or refuse the application. The employer shall inform the employee in writing of the employer’s approval or refusal of the application under subsection (1) and in the case of a refusal, the employer shall state the ground for such refusal.

6) New Section 69F – Discrimination in employment, which employer is liable to a fine not exceeding RM50,000 and shall also, in the case of continuing offence, be liable to a daily fine not exceeding RM1,000 for each day the offence continues after conviction.

7) New Section 81H – Notice on sexual harassment – an employer shall always exhibit conspicuously at the place of employment a notice to raise awareness on sexual harassment.

8) Blacklisting employers from employing foreign workers for breaches of labour legislations.

With these HR changes effective 1 January 2023, it seems that employers will be burdened to prepare for the impact the changes will cause their organisation. These includes increase in costs, reduction in daily operation’s efficiency, measuring employees’ performance, disciplinary and financial issues.

Employers have no option other than to accept the implementation of these HR changes effective 1 January 2023. Otherwise, a fine will be imposed.

Read: A “Not-So-Great” Resignation: 39% Of Professionals In Malaysia Who Have Thought Of Resigning In The Past Year Didn’t Leave Their Jobs

Still Reeling From The Pandemic

Image by pressfoto on Freepik

Many employers are now beginning to bounce back after facing the pandemic for two years. Just when their businesses are going back to normal, the new minimum salary of RM1,500 came into effect on 1 May 2022, which have stunted their recovery.

As a HR Consultant, I’ve heard from clients that the current amendments are more lopsided towards the employees, while employers’ plights are not being heard by the Government. There was no proper discussion between the employers to gain their feedback on these matters.

In the business world, employers play an important part in providing jobs to the community. There are 1.15 million Small and Medium Enterprises (SMEs) in Malaysia, which makes them a special breed and needs to be taken care of. Already there’s a lot of regulations that they have to comply with, failure which will result in fines and jail time.

Employers should not be underestimated as if they did not plan ahead for the future. They have their employees’ interest at heart, so the organisation can prosper. When the employees perform well, the company makes profit, and benefits will be passed around.

It is indeed a struggle to keep up with the rise in inflation and interest rates, which affects both employees and employers. It is hoped that the Government will help small companies thrive. As the proverb goes, “Where there’s a will, there’s a way”. There must be a way to create a win-win solution for both parties.

But as of now, get yourself ready with these HR changes effective 1 January 2023.

Read: Establishing Diversity, Equity and Inclusion As The Norm In All Workplaces

About the Author

Rozina Md Derus is the Managing Director / CEO of Click H & A Consultancy Sdn Bhd. The company started in 2013 and have helped hundreds of business owners, mostly from the young generation who are actively involved in doing business but with zero knowledge in handling their PEOPLE.

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