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MEF expects 90-day maternity leave to cost bosses additional RM1.5 billion

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Malaysian Employers Federation (MEF) president Tan Sri Azman Shah Haron revealed that private sector employers may be hit with RM1.5 billion in additional expenses annually if maternity leave is expanded from 60 to 90 days, The Malaysian Reserve reported.

According to a cost-impact study conducted by the association, “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.

Earlier during the tabling of Budget 2018, the government proposed for the mandatory period of maternity leave for the private sector to be increased from 60 days to 90 days.

Employers have been warned that actions can be taken if companies dismissed their female staff for taking the 90-day maternity leave option, The Malaysian Reserve stated, adding that there is no specific clause related to the leave.

Currently, the law states that private sector employers are to pay the full wages for 60 fays of maternity leave.

In view of the proposed expanded maternity leave; the higher minimum salary rate for Peninsular Malaysia, Sabah, Sarawak and Labuan; the new foreign worker levy policy; and the Employment Insurance Scheme; Azman Shah claimed that employers had to tighten their operational costs — including resorting to layoffs or adopting new technology and automation to cushion the rising expenditure.

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