L & Co’s advice for employer
What should employers do for the FULL SALARY PAYMENT during the Movement Control Order? Why can’t we ask our employees take unpaid leave while some big corporates able to do so?
In conjunction with the implementation of the Order since 18 March 2020, employers are now facing a problem: Continue Paying for employees’ salaries according to the government’s announcement, and work cannot be carried out at due to restriction order. Thus, what should employers do?
Current status：
1) According to the current statement from the Ministry of Human Resources, employers are required to pay salary and related allowances during the Order (regardless of whether work can be performed at home), except for transportation allowance and attendance allowance. Employers cannot force their employees take annual leave or unpaid leave.
2) According to Employment Retrenchment Notification 2004, if an employer decides to retrenchment, temporarily lay-off, voluntarily separation scheme (vss) or salary reduction, employer must report to the Ministry of Labour via Borang PK (link is provided below).
3) For employees with a monthly salary less than RM4,000 and contributing EIS, employers can submit applications with Perkeso since 20 March 2020 and get 6 months financial assistance (RM600 per month) if their employees are getting unpaid leave. (Please take note that this is only applicable when you have submitted Form PK)
Our suggestions：
1) Since the uncertainty for the end of The Movement Control Order, employers are advised to submit Borang PK to the Ministry of Labour in order to obtain the right to ” retrenchment, temporarily lay-off, voluntarily separation scheme (vss) or salary reduction “.
2) After above action, employers can announce the available options to their employees (For example Malaysia Airlines requires employees to take voluntary unpaid leave and reduce 10% of senior management’s salary), we suggest the following options:
- Adjust the working hours based on workload that can perform at home (e.g. 2 hours working hour per day, and the other 6 hours are unpaid leave) and adjust accordingly for employees’ salary (salary x 2/8 hours)
- Remain the same working hours (8 hours per day), and perform pay-cut temporary (e.g. 3 months) reduce 80% of the salary (Similar with the financial assistant provided by PERKESO)
- Unpaid leave for those unable to work at home
- Voluntary separation scheme
3) Ask the employees to select the option given in no 2 and keep the records. If you need the announcement & options template, please fill in your information at https://bit.ly/2JnqEj5, and we will send them by email on 10am, 24 March 2020. Please don’t pm us to ask for template.
4) We sincerely hope that employers can let their employees know the existing economic difficulties, and request their employees staying at home to avoid the virus continuing to ravage the economy. We hope everyone can work together and fight against the COVID-19 !
Suggestions given above are based on the current situations (we cannot guarantee you all these suggestions suitable to you). If you need a professional and affirmative solution, we suggest that you consult with your lawyer or the Ministry of Labor directly.
Links related to this post：
👉Download Borang PK – http://jtksm.mohr.gov.my/…/Pemberhentian_Peke…/borang_pk.pdf
👉Employment Retention Plan (ERP) – https://www.facebook.com/LANDCO.MALAYSIA/posts/891003541348043
👉Employment Insurance System (EIS): https://www.liew.my/social-zh/eis-zh/
👉Borang PK Guidance – http://jtksm.mohr.gov.my/images/pdf/Borang/Pemberhentian_Pekerja/garis_panduan_pemberhentian_pekerja.pdf
FAQs.
1) Our company requested us to take unpaid leave when they heard on the announcement on 16/3/20. Are we entitled for EIS financial assistant?
No, EIS is financial assistant for those employees who were retrenched by company because of financial problem. Only company that has submitted Form PK is eligible to apply for the EIS financial assistant.
2) Can we ask our staff to get unpaid leave or annual leave in this period 18/3 – 31/3?
No, unless you have submitted Form PK 30 days before (15/2/20), otherwise you cannot ask your staff take unpaid or annual leave based on existing laws & government announcement.
3) Form PK shall submitted 30 days before, will it help on current status?
All employers are required to pay full salary on current status, therefore submitting Form PK will not help on it, however it does help if the restriction order period extended. Employers who have submitted Form PK have the right to ask their employees for salary reduction, taking unpaid leave or annual leave.
4) Can we insist our employees for salary reduction, take unpaid leave or annual when the situation getting better after we submitted Form PK?
Form PK is for those companies that facing financial difficulties to negotiate/adjust their employees’ remuneration. We suggest you resume their payroll if possible.
5) Can I submit Form PK if my company is not facing any financial difficulties in paying full 18/3 – 31/3 salaries?
Form PK is the form to inform labour office that your company is facing financial difficulties and going to negotiate/adjust your payroll. We advice you to submit it because you cannot negotiate/adjust your payroll immediately when you faced financial difficulties under existing law. You can adjust the payroll back to normal anytime if you think salary reduction is not necessary.
6) My company don’t want to dismiss our staff, I though Form PK is for retrenchment purpose?
There are 4 situations (retrenchment, temporarily lay-off, voluntarily separation scheme (vss) or salary reduction) that apply on Form PK. When you are requesting your staff to take unpaid leave/salary reduction during this period, Form PK shall be submitted 30 days before it effective.