MEF: 90 days maternity leave to cost firms RM1.5b

Its president says employers are already saddled with the minimum salary rates


The private sector could be hit with an additional cost of RM1.5 billion annually in additional expenses, if the maternity leave for female employees is expanded from 60 days to 90 days.

Malaysian Employers Federation (MEF) president Tan Sri Azman Shah Haron (picture) said the association had conducted a cost-impact study related to the additional one-month maternity leave on related stakeholders.

“The additional cost to employers is estimated at about RM747 million per year. Bear in mind that employers also need to pay for replacement cost, which would also amount to about RM747 million.

“Thus, the total increase will be about RM1.5 billion per year,” Azman Shah said at the Inland Revenue Board-MEF Seminar 2018 in Subang Jaya yesterday. His speech was read by MEF VP Dr Michael Chiam Tow Hui.

The government had earlier proposed a 90-day maternity leave for the private sector. The proposal was made during the tabling of Budget 2018 last year. The government sector is already providing 90 days of maternity leave to its female employees.

Employers have been warned that actions can be taken if companies dismissed their female staff for taking the 90-day maternity leave option.

However, there is no specific clause related to the leave.

The current law states that private sector employers are to pay the full wages for 60 days of maternity leave.

Azman Shah said employers are already saddled with the minimum salary rate of RM1,000 for Peninsular Malaysia and RM920 for Sabah, Sarawak and Labuan.

“The minimum wage marked an increase by 11% for Peninsular Malaysia and 15% for East Malaysia,” he said.

He added that companies are also burdened by the new foreign levy policy which took effect last month, where employers are required to pay their foreign workers’ levy.

“Businesses would struggle as employers stand to lose about RM3 billion to RM4 billion working capital with this move (to pay the levy),” said Azman Shah.

Last month, employers had to comply with the new Employment Insurance Scheme under the Social Security Organisation.

The 0.2% monthly contribution by employers is meant to assist retrenched workers, if they are retrenched.

He claimed employers had to tighten their operational costs — including resor t ing to lay-of fs or adopting new technology and automation to cushion the rising expenditure.