Minister of Human Resources, V Sivakumar has reminded all employers in Malaysia that all wage payments to all employees both local and foreign must be paid through bank accounts.
This mandate is in correlation with the provisions under Section 25 and 25 (A) of the Employment Act 1995 [Act 265]. Any wage payment done in cash or cheque can only be done at the request of the employee themself and with the permission from the Director General of the Department of Labour of Peninsular Malaysia as it is stated under Section 25A (1) of the same act.
He said that if any employer is found to be wage payments in ways other than a bank account (except if granted permission as stated above) is considered to have committed an offence. If they were to be convicted, the employer can be fined up to RM 50,000.
This reminder was given after the emergence of an issue of forced labour especially foreign workers where they were not paid or received late payment on a voluntary basis. It was established that workers who are not paid or are paid late constitute one of the 11 elements of forced labour outlined by the International Labour Organisation (ILO).
The Ministry of Human Resources has elaborated that employers must comply with the wage payment being only done through a bank is one of the mechanisms that allows the Government to monitor employer activities. Furthermore, this method may help reduce allegations regarding the issue of forced labour.
He stressed that the Ministry further highlighted that compliance with the Act is crucial for employers, especially those involved in the exportation of goods. The employers accused of engaging in forced labour will face sanctions and their products will no longer be allowed to enter the country’s import market. Furthermore, this will impact the image of the company and the country.
The MOHR urges employers to continue complying with all enforced Acts. Enforcement activities by all departments and agencies under MOHR will continue to be implemented in accordance with the legislation under the jurisdiction provided.
