From time to time, we work exceeding our scheduled normal working hours because of unfinished task, rushing projects.
But how does overtime been described in Malaysia Employment Act and are we complying according to Malaysia Employment Act?
1. Overtime Formula – Hourly rate IS NOT ONLY basic / 26 / 8 !!!
In general, payment such as Shift Allowance, Call Back Allowance, Attendance Allowance, Acting Allowance are subject to Wages and they must be considered into overtime calculation.
EMPLOYMENT ACT 1955, SECTION 2:
“wages” means basic wages and all other payments in cash payable to an employee for work done in respect of his contract of service but does not include—
(a) the value of any house accommodation or the supply of any food, fuel, light or water or medical attendance, or of any approved amenity or approved service;
(b) any contribution paid by the employer on his own account to any pension fund, provident fund, superannuation scheme, retrenchment, termination, lay-off or retirement scheme, thrift scheme or any other fund or scheme established for the benefit or welfare of the employee;
(c) any travelling allowance or the value of any traveling concession;
(d) any sum payable to the employee to defray special expenses entailed on him by the nature of his employment;
(e) any gratuity payable on discharge or retirement; or
(f) any annual bonus or any part of any annual bonus;
2. Which Employee should be protected under Malaysia Employment Act?
For employees with salary not exceeding RM2000 a month or those falling within the First Schedule of Employment Act 1955 is protected under the Employment Act 1955.
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.
EMPLOYMENT ACT FIRST SCHEDULE, SUBSECTION 2(1)
Any person, irrespective of his occupation, who has entered into a contract of service with an employer under which such person’s wages do not exceed two thousand ringgit a month.
2. Any person who, irrespective of the amount of wages he earns in a month, has entered into a contract of service with an employer in pursuance of which—
- he is engaged in manual labour including such labour as an artisan or apprentice:
- he is engaged in the operation or maintenance of any mechanically propelled vehicle operated for the transport of passengers or goods or for reward or for commercial purpose;
- he supervises or oversees other employees engaged in manual labour employed by the same employer in and throughout the performance of their work;
- he is engaged in any capacity in any vessel registered in Malaysia and who—
- is not an officer certificated under the Merchant Shipping Acts of the United Kingdom as amended from time to time;
- is not the holder of a local certificate as defined in Part VII of the Merchant Shipping Ordinance 1952 [F.M. 70/1952]; or
- has not entered into an agreement under Part III of the Merchant Shipping Ordinance 1952; or
- he is engaged as a domestic servant
Provided that where a person is employed by one employer partly in manual labour and partly in some other capacity such person shall not be deemed to be performing manual labour unless the time during which he is required to perform manual labour in any one wage period exceeds one-half of the total time during which he is required to work in such wage period;
3. Overtime on rest day
Employee who works overtime on rest day not exceeding half his/her normal hours of work: -
More than half but up to eight (8) hours of work:-
In excess of eight (8) hours:-
EMPLOYMENT ACT 1955, SECTION 60:
(3) (a) In the case of an employee employed on a daily, hourly or other similar rate of pay who works on a rest day, he shall be paid for any period of work—
- which does not exceed half his normal hours of work, one day’s wages at the ordinary rate of pay; or
- which is more than half but does not exceed his normal hours of work, two days’ wages at the ordinary rate of pay.
(b) In the case of an employee employed on a monthly or weekly rate of pay who works on a rest day, he shall be paid for any period of work—
- which does not exceed half his normal hours of work, wages equivalent to half the ordinary rate of pay for work done on that day; or
- which is more than half but which does not exceed his normal hours of work, one day’s wages at the ordinary rate of pay for work done on that day.
(c) For any work carried out in excess of the normal hours of work on a rest day by an employee mentioned in paragraph (a) or (b), he shall be paid at a rate which is not less than two times his hourly rate of pay.
(d) In the case of an employee employed on piece rates who works on a rest day, he shall be paid twice his ordinary rate per piece.
4. Overtime on Public Holiday
Employee who work on Public Holiday and less than normal hours of work: -
But, in excess of normal hours of work: -
EMPLOYMENT ACT 1955, SECTION 60D. 3(a)
(3) (a) Notwithstanding subsections (1), (1A) and (1B), any employee may be required by his employer to work on any paid holiday to which he is entitled under the said subsections and in such event he shall, in addition to the holiday pay he is entitled to for that day—
(i) in the case of an employee employed on a monthly, weekly, daily, hourly, or other similar rate of pay, be paid two days’ wages at the ordinary rate of pay; or
(ii) in the case of an employee employed on piece rates, be paid twice the ordinary rate per piece,
regardless that the period of work done on that day is less than the normal hours of work.
(aa) For any overtime work carried out by an employee referred to in subparagraph (a)(i) in excess of the normal hours of work on a paid public holiday, the employee shall be paid at a rate which is not less than three times his hourly rate of pay.
(aaa) For any overtime work carried out by an employee referred to in subparagraph (a)(ii) in excess of the normal hours of work on any paid holiday, the employee shall be paid not less than three times the ordinary rate per piece.
5. Overtime Rate of Pay
Any employee works for overtime, his/her pay rate must not be less than 1.5 times of his hourly rate.
EMPLOYMENT ACT 1955, SECTION 60A. (3)(a)
For any overtime work carried out in excess of the normal hours of work, the employee shall be paid at a rate not less than one and half times his hourly rate of pay irrespective of the basis on which his rate of pay is fixed
6. Maximum Overtime Hours
The Employment (Limitation of Overtime Work) Regulations 1980 provides 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. Employers must be mindful that they must not require any employee under any circumstances to work more than 12 hours in any one day.
EMPLOYMENT ACT 1955, SECTION 60A. (4)(a)
No employer shall require or permit an employee to work overtime exceeding such limit as may be prescribed by the Minister from time to time by regulations made under this Act, and the regulations so made may provide different limits for different classes, categories or descriptions of employees, and such regulations may also provide for such classes, categories or description of employees, as may be specified, to be excluded from their application
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