This was written shortly before the announcement of Malaysia's Budget 2020, where paid maternity leave has been proposed to increase from 60 to 90 days.
I would like to address a few concerns on Malaysia's laws on parent leave and parental allowance.
To briefly reiterate the Employment Act of Malaysia (1955)'s current stance on parental leave and statutory monetary allowances, currently, employed women who give birth to a child must receive up to 60 days of statutory maternity leave with allowance, at the liability of their employer. Fathers receive no parental leave and no allowance.
Concern #1. Statutory parental allowances (moms' and dads' paid leaves) are still charged to the private sector
In short, we need a 'single payer' system for statutory parental benefits, instead of involving thousands of companies' and distorting their trading/accounting concerns.
In many countries, the burden of payment of parental leave falls upon the government. Further studies are required to determine the pros and cons of such a policy. From my own limited perspective, what I do see in Malaysia is that this policy favours large businesses over small businesses.
Under the current law, an employee who has worked as little as three months out of a nine-month period may qualify for paid maternity leave, for another two months after that. This means that an employer (who abides by the law) has to budget for up to five months of pay, for a staff who delivers only three months of work, while the employer also has to juggle this process over an eleven month period. Larger businesses with specialised human resource and finance administrators are at an advantage in dealing with this phenomena. Smaller businesses are at a disadvantage.
So as I see it, the current implementation (law) is flawed, even though it aims to implement a desirable policy (paid maternity leave). The current implementation of the policy unequally burdens small businesses, and thus makes it more difficult for new merchants to lift themselves out of poverty (read: those who are young, inexperienced, and without special access to capital). Furthermore, this exacerbates a feedback loop which reduces the competitiveness of those smaller businesses, and reducing the effectiveness of the free market economy as a whole. This finally jeopardises economic reforms and our national goal to become competitive on a global scale.
I hope that the present and future ministers of Malaysia will consider changing the law, to nationalise the cost of compensating parents of any gender, for their duties in national building, via child-bearing and child-rearing. Instead of adding complexity to the accounting and administrative processes of thousands of private companies, I implore the relevant ministers and their staff to consider the benefits of a simplified single federal program which reimburses parents for their statutory parental allowances. Of course, the cost of this program should be compensated for by higher taxes.
More taxes, one place to collect benefits, and less complexity for everyone.
I hope this appeal gets an ear.
Concern #2. Paternity (dads') leave is still unequal to maternity (moms') leave
I hope that our ministers seek further to design families where the burden of child-rearing responsibilities are divided equally among parents. For reference, take a look at Spain's policy of progressively equalising paternity and maternity leaves.
Concern #3. Maternity (moms') leave is still too short
At 9-10 weeks, Malaysia's maternity leave falls behind a number of other countries which provide 12 -14 weeks of leave. Fast forward to this week's news, on 6 October 2019 Malaysian newspapers reported that the Human Resources Ministry is proposing an increase in the number of maternity leave days from 60 to 98. Bravo. Curiously, reporters haven't added comments from the Ministry of Women, Family, and Community Development, thought surely social policies such as these fall somewhat under their portfolios also.
What follows below is a broader, but related issue:
Throwing back to a broader point which I wrote about in June, parents and non-parents can't be compensated differently by the PRIVATE sector, without distorting the talent management finances of thousands of companies.
Paternity Leave - my brief policy opinion: we should have 90 days optional paid leave per annum, for a maximum of two years every seven years, for all employees, regardless of parenthood, and regardless of gender. This should be funded via a government fund. Having employers pay for it is completely ass backwards.
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