Thursday, September 30, 2010

Part-Time Work Regulations Implemented

If you recall my post on Dr Fong Chan Onn’s thoughts on the minimum wage, one of the things that he recommends and foresees is greater part time work and a more flexible labour force.

Well, the changes to the Employment Act 1955 enacted in August will come into force tomorrow:

New rules on part-time work

PUTRAJAYA: Only those working between 30% and 70% of the eight-hour stretch daily will be considered part-timers under new rules from next month, said Human Resource Minister Datuk Dr S. Subramaniam…

…He said staff working below 30% of the eight-hour stretch would be categorised as casual workers while those putting in more than 70% were full-timers.

“However, we are allowing flexibility in the number of hours put in by part-timers for each day. Employers can decide if they want to calculate the number of hours on a daily, weekly or even monthly basis...

…Dr Subramaniam said the new rules, which were expected to benefit 6.8 million latent workers, would allow part-timers to find regular employment.

He said it would also enable employers to regularly hire staff that they did not require on a full-time basis as well as give better protection to part-timers by outlining the compensation they were entitled to if they were involved in workplace accidents.

Asked if the new rules would cause some employers to choose to hire more part-timers, Dr Subramaniam said this would not be in the best interest of companies…

…“Employers will also save little by doing this because they will have to pay wages and EPF and Socso contributions for part-timers on a pro-rated basis.

“Part-timers will be entitled to leave, including medical leave, for which the days are also to be calculated on a pro-rated basis,” he said.

The number of people which these new rules are aimed at is pretty hefty - more than a third of Malaysia’s potential labour force (ages 15-64) aren't working:


About 2.5 million are of school age (and hopefully they are in school), which leaves around 4 million latent workers not contributing to the "official" economy.

Some will be in the “black” economy who aren’t fully captured in official statistics, such as cottage and backyard industries, street vendors, and yes, illegal stuff like prostitution, smuggling and theft. But many are also women who aren’t fully integrated into the workforce. Even in the 25-34 age bracket, less than two-thirds of women are in the work force – the participation rates are even worse for older cohorts. So providing for minimum guaranteed protection and benefits for part time work is I think a highly positive step towards bringing these people in the workforce.

The goal of the NEM/ETP is to transform Malaysia into a high-income nation by 2020. But this is also a numbers game: if you can get more people into the “official” economy and being captured by the “official” statistics, then you’re half way there. The more people being registered as having an income means per capita income will rise (more people working relative to the total population), without bothering with EPPs, BOs or any other acronyms.

At the ground level though, I don’t think there’s any doubt that we’re going to see some cultural changes too, especially in the Bumiputera community. More women working means greater financial independence, and some adjustments to gender relationships. At the workplace, companies might find out that they are happier with more part time workers rather than full-time workers, which would reduce job security generally. And with the technological capability that we have now, there’s also a greater possibility of people working from home, rather than commuting.

Interesting times.

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