There are laws governing the hours of work and overtime work for employees under the employment laws of Malaysia.
This article aims to clarify this part of the employment laws that baffled our clients.
Sources of Law
For employees with salary not exceeding RM2000 a month or those falling within the First Schedule of Employment Act 1955, the laws in this respect are spelled out in the Employment Act 1955 (“the EA”).
Whereas for employees whose salary exceeded RM2000 a month, the hours of work and overtime work shall depend on the terms agreed under their employment contracts.
The hours of work and overtime work will have a direct impact to the productivity and profitability, especially to the industrial products manufacturers which were highlighted to us when seeking our advice in this area of the law.
Hours of Work
The law on this is basically provided in section 60A(1) of the EA. It says an employee shall not be required under his contract of service to work:-
(a) more than 5 consecutive hours without a period of leisure of not less than 30 minutes duration;
(b) more than 8 hours in 1 day;
(c) in excess of a spread over a period of 10 hours in 1 day;
(d) more than 48 hours in 1 week.
This provision was drafted at the time when most employees in our country are required to work for 6 days a week, therefore, are required to work only for a maximum of 8 hours per day.
However there was an amendment came with effect from 1st August 1998 in the form of proviso (iii) to section 60A of the EA, where the law allows that, by agreement between the employers and employees, where the number of hours of work on 1 or more days of the week is less than 8 hours (for instance, some workers are required to work half day on Saturday or some not even required to work on Saturday), the limit of 8 hours may be exceeded on the remaining days of the week, provided that no employee shall be required to work for more than 9 hours in 1 day or 48 hours in 1 week.
We opined the reason for this provision is to cater for those who opt to work for 5 days a week instead of 6 days. For instance, where the employees are not required to work on Saturday, then for the remaining days of the week, the employees will be required to work for more than 8 hours but not more than 9 hours in 1 day.
The positive side of this amendment is to improve the quality of life of many Malaysian employees by reducing such hidden costs of traveling to or at work and the employees will have 1 more day off to spend with their family or to deal with other aspects of their life while not reducing their productivity at work. Rather, this motivates them to complete the task at hand in a shorter time frame. The benefits are not only instantaneous but far-reaching.
Hours of Overtime Work
Section 60A(3) of the EA defines that ‘overtime work’ means the number of hours of work carried out in excess of the normal hours of work per day as provided in section 60A(1) of the EA.
Likewise, there is a limit to overtime work. The Employment (Limitation of Overtime Work) Regulations 1980 provides that the limit of overtime work shall be a total of 104 hours in any 1 month. This means an average of about 4 hours in 1 day.
Despite the pay rate shall be 1 ½ times the hourly rate of pay of employees, some employers found it rather economical to required employees to work overtime than hire a new employee.
But, the employers must be mindful that they must not require any employee under any circumstances to work more than 12 hours in any one day.
Payment of Overtime Work
The pay for overtime work shall be at a rate of not less than 1 ½ time of the employee hourly rate of pay. Hourly rate of pay means the daily rate of pay divided by the normal hours of work as agreed between the employers and empoyees. For guide on calculating hourly rate of pay, kindly refer to Calculation for Overtime Payment.