Longer Maternity will have Cost Impact on Small Businesses: MEF
The Human Resources Ministry’s proposal to increase the number of maternity leave from 60 to 98 days for the private sector will have a cost impact on business, especially smaller businesses.
Malaysian Employers Federation executive director, Datuk Shamsuddin Bardan said the federation is open to having more maternity leave, subject to the cost not being loaded on employers, but borne by the government or social security. “When the government first mooted increasing private sector maternity leave to 90 or 98 days, one of the major concerns of employers is the cost impact,” he said. Currently, employers pay the 60 days’ cost of maternity leave. “We are concerned especially in light of the sluggish economic situation where employers are barely able to absorb additional costs,” he said. While bigger firms may be able to afford to pay for more maternity leave, he said his main concern is with smaller businesses. “It is the micro-enterprises that can ill afford to bear additional costs,” he said, estimating that there are about 650,000 companies which have fewer than five employees.
The Human Resources Ministry has suggested that employers bear the cost of maternity allowance for 19 days of the additional 38 days, while the remaining days be recorded as unpaid leave. At present, employers are only “encouraged” to comply with a Budget 2018 announcement to raise the maternity leave for the private sector to 90 days. In the public service, women are entitled to 90 days of maternity leave.
This latest move from the ministry comes after the release of a World Bank report titled “Breaking Barriers: Toward Better Opportunities for Women in Malaysia” last month which highlights the difficulties faced by women in the labour market. “One of the significant steps taken by the ministry to address the suggested reforms is to increase the number of maternity leave from 60 to 98 days, equivalent to 14 weeks, under the Employment Act,” the ministry said. “In addition, it is proposed that employers cannot terminate a pregnant employee unless employers can prove the termination is not because of pregnancy, ” it said.
According to the ministry, paternity leave of three days will also be introduced in the proposed amendments to the Employment Act. Legally mandated paternity leave will allow the fathers to help the mothers with their post-pregnancy recovery and strengthen the father-child relationship, the ministry said. Currently, fathers in the private sector are not legally entitled to any paternity leave, while fathers in the public sector are given seven days of paid paternity leave.
The proposed amendments to the law must first be submitted for Cabinet’s approval. No date has been given yet on when the Cabinet will decide on the matter.
The World Bank report stated that the promotion of economic opportunities for women is one of the most promising avenues for Malaysia’s future development. It added that if all economic barriers are removed for women, Malaysia’s income per capita could grow by 26.2% – implying an average annual income gain of RM 9,400. The report noted that although Malaysia’s female labour force participation rate has risen significantly in recent years from 46.8% in 2010 to 55.2% in 2018 it remains low given Malaysia’s level of development and when compared to other countries in Southeast Asia. It highlighted that in 2018, 80.4% of working-age men were in the labour market but only 55.2% of women were involved.
The report recommended that to ensure equal access to productive jobs, Malaysia should look towards policy directions that facilitate economic opportunities for women. These include:
• Expanding the availability, quality and affordability of child and elderly care as part of a comprehensive policy approach. This includes increasing child care coverage from 0–6 years to 0–17 years and prioritizing resources on child and elderly care for the bottom 40%, especially the urban poor.
• Strengthening the protection and productivity of informal workers and business owners to harness women’s full economic potential.
• Pursuing planned reforms of the legal environment and strengthening the implementation, monitoring and enforcement of laws and regulations.
• Improving support for parents in line with international legal norms.
• Addressing gender norms and attitudes in education and among the wider population
Source: The Star, World Bank