BENEFITS

A.Statutory benefits

The Employment Act 1955 and the Sabah and Sarawak Labour Ordinances ( amended as of 2005) require employer to give certain benefits to employees who are covered by the Act. While some groups are excluded from coverage most particularly those earning more than RM1,500 per month in Peninsular Malaysia and RM2,500 per month in Sabah and Sarawak.

Of course there are some group may receive more than is provided in the Act, either because the employer wishes to give more ao as to attract and retain staff or because the workers concerned are unionized and through their union, the workers have been able to negotiate a better deal.

1. Maternity Benefits

Maternity Leave

Every time an employee gives birth, she is entitled to 60 days maternity leave (calendar days). There is no limit on the number of times an employee is entitled to take maternity leave. If an employee gives birth before 22 weeks of pregnancy, she is not entitled to maternity leave, even if her baby should survive. She will be entitled to sick leave if a doctor certifies her not fit for work.

Maternity Allowance

Employees on maternity leave are entitled to be paid their normal monthly wages providing:

1. They have worked with the employer for at least 90 days and2. They have no more than 5 children

If an employee has given birth to her sixth child, she will only be entitled to unpaid maternity leave.

Maternity Register

The Employment Act requires that every employer keep a register of maternity leave taken and the payment received by all employees. A format for the register is provided in the First Schedule to the 1957 Employment Act Regulations.

Payment of Maternity Expenses

Employers are not required to pay for their employees maternity expenses. However, it is a common benefit which is popular with workers. In order to control your benefit costs, especially if the organisation has many female workers, you may wish to place a limit on how much employees can claim for maternity expenses. Check with several local maternity clinics so that you know the current rate charged for their services.

2. Sick Leave

The Right to Paid Sick Leave

Employees within the scope of the Employment Act are entitled to paid sick leave depending upon their length of service with your organisation.

Employees entitlements to sick leave per year are:

1. If the employee has less than 2 years service: 14 days2. If the employee has more than 2 years service but less than 5: 18 days3. If the employee has more than 5 years service: 22 days

An employee who is certified unfit for work by a doctor but who has taken all of his sick leave entitlement must be given unpaid leave.

To be entitled to paid sick leave, an employee must inform the employer within 48 hours of taking sick leave and submit a medical certificate (MC) from a registered medical doctor upon his return to work. If he does not submit an MC, he can be considered absent without leave and disciplinary action should be taken against him or her.

Introduce and enforce a clear policy on who is to be informed when an employee is sick. Decide whether he is required to speak by telephone to a company officer or whether he is permitted to send an e-mail or telephone message.

Many employers appoint one or more panel doctors. If your organisation has appointed panel doctors, employees cannot visit any other doctor if they wish to be paid during their sick leave. In other words, if an employee visits a non-panel doctor who gives the employee an MC, the employee will be entitled to unpaid sick leave.

There are two exceptions to this rule:

1. If the employee is faced with a medical emergency, he can visit the nearest doctor2. If the services of the panel doctors are not available because they are all closed or the employee is outstation, he can visit any doctor, including a doctor in a government clinic or hospital.

You do not have to appoint any panel doctors, in which case your employees are free to visit any doctor and you will be required to pay the employees if they are certified unfit to work by the doctor.

Payment of Medical Bills

Employers are required by the Employment Act to pay doctors bills for the examination of their employees. The law is not clear whether you also have to pay for treatment provided by the doctor including medicines. It is usual for employers to either:

1. Pay all medical bills presented by employees, or2. Pay employees medical bills but set a limit on how much the company will pay pervisit, per month or per year. Employees will be appreciative if the limit set by the company is on an annual basis.

Hospitalization

If an employee requires hospitalization, his paid sick leave entitlement per year increases to 60 days inclusive of ordinary sick leave.

Abuse of Sick Leave

Abuse of sick leave is a wide-spread problem. Be vigilant. If any MC looks suspicious, checkwith the clinic which issued it.

Medical Benefits for Employees Not Covered by the Employment Act

For employees who are not covered by the Employment Act each organisation must decide what benefits to offer and the value of each benefit. It is not a good practice to discriminate between one group and another in relation to medical benefits.

3. A Weekly rest day

Section 59 of the Employment Act stipulates that all employees are entitled to one rest day per week. An employee may not be required to work on his rest day, except in circumstances stated in the law. When employee works on a rest day, he will be entitled to premium rates of pay.

4. Public Holidays

Public Holidays and the Employment Act

The Employment Act states that employees are entitled to a minimum of 11 paid public holidays each year. Five public holidays are compulsory. These are:

1. Workers Day2. Independence Day3. Malaysia Day4. Agongs Birthday5. State Rulers Birthday

Each employer has the right to choose the other 6 holidays for his employees. Choose carefully. Try to balance the needs of your business and the preferences of your employees.

When a public holiday falls on an employees rest day, automatically the next work day will be a holiday for the worker.

If you need the employee to work on one of the public holidays to which he is entitled, you have two choices:

1. Order the employee to work and pay him two extra days wages or2. Ask the employee if he agrees to work on the publicholiday and take a day off at some other time

Public Holidays and the Sabah Labour Ordinance

The Sabah Labour Ordinance lays down the same rules on public holidays as apply in the Employment Act except that workers within the scope of the Ordinance are entitled to a minimum of 14 public holidays per year.

Public Holidays and the Sarawak Labour Ordinance

The Sarawak Labour Ordinance lays down the same rules on public holidays as apply in the Employment Act except that workers within the scope of the Ordinance are entitled to a minimum of 16 public holidays per year.

5. Annual Leave

Employees within the scope of the Employment Act are entitled to annual leave after they have completed one year of service. The entitlement is as follows:

1. Employees with 1-2 years service: 8 days leave2. Employees with more than 2 but less than 5 years service: 12 days leave3. Employees with more than 5 years service: 16 days leave

Introduce a system so that all employees know how to apply for leave. Clarify who is responsible to approve or reject any application for leave. Keep records of all leave taken. Many disciplinary issues result from employees going on leave without getting permission. Do not allow such a practice. If any employee goes on leave before approval has been issued, take disciplinary action on this matter. At the same time, encourage managers to approve employees application for leave as long as the workers absence will not cause a major problem.

If, at the end of the year, an employee has applied to take some or all of his leave and his application has been rejected, the company has to pay the employee wages in lieu of the leave not taken. If an employee has 12 days leave entitlement of which he has taken 10 days but was not permitted to take the remaining 2 days because of a shortage of staff or some other reason, the company will have to pay him the 2 days wages.

6. The Employees Social Security Act

Make sure your organisation is registered with the Employees Social Security Organisation (SOCSO or, in Bahasa Malaysia PERKESO). All employees who are Malaysian citizens or permanent residents who earn RM3,000 or less per month are within the scope of the Act. Once an employee is registered as a member, even if his wages increase to a sum above RM3,000 per month, he remains a member of the Organisation and you must continue to pay monthly contributions on his behalf.

If you hire a new worker, who has not yet registered with SOCSO, it is your responsibility to make sure he fills out the SOCSO forms and registers as a member.

Every month you must remit to SOCSO the required contributions which amount to approximately:1. 1.75% of the employees monthly wages (the employers contribution) and2. 0.5% of the employees monthly wages deducted from his wages (the employees contribution)

The exact amount of the contribution can be found on the SOCSO website (www.perkeso.gov.my) under the Schedule of Contributions.

Any work-related accident for which the employee is on medical leave for more than 4 days must be reported to SOCSO so that the appropriate claims can be made by the employee. The appropriate forms must be completed and submitted together with a copy of the employees punch-card or other attendance record, a copy of the employees medical certificate and a copy of his identity card.

7. The Employees Provident Fund Act

Similar to the requirements of SOCSO, every organisation must register with the Employees Provident Fund (EPF) and pay monthly contributions to the Fund. These contributions include both an employers contribution and the employees contributions which are deducted from their wages and remitted to the EPF.

Currently, the monthly contributions are approximately as follows:

1. Employers contribution for employees earning RM5,000 and below: 13% of wages2. Employers contribution for employees earning above RM5,000: 12% of wages3. Employees contribution: 11%

The exact amount of the contribution can be found on the EPF website (www.kwsp.gov.my) under the Schedule of Contributions. Failure to pay EPF contributions is a serious offence. If you have questions about paying EPF contributions, read their website or contact your nearest EPF office.