Employees Return to the Office on Reduced Salaries

The government lifted the work-from-home (WFH) policy on April 1, 2021. The policy allowed only 30% of employees to work from the office in Conditional Movement Control Order (CMCO) areas. Now all employees are returning to the workplace.

Salary cut

Unfortunately, some workers are still working on reduced wages. According to employers, they can only reinstate full salaries after business has picked up. 

Based on a report by The Sun, an employee of an entertainment company said that it has been tough saving money to cover her family's needs. She said that her salary was reduced from RM3,100 to RM1,550 per month after the government declared the first MCO on March 18, 2020.

A survey conducted in 2020 found that 30% of respondents say that their employers had cut their wages and they were worried about their finances and job security.

Necessary to sustain the business

Malaysian Employers Federation executive director Datuk Shamsuddin Bardan stated that wage cuts were necessary to help businesses stay afloat during the MCO. 

He said that it will still take time for business to pick up even though the government has lifted the WFH policy. The constraints have caused companies to take some time before they can reinstate full wages. 

Shamsuddin said that businesses would get "back to normal" once Malaysia achieves herd immunity against COVID-19.

According to MEF, employers will reinstate full salaries after business has picked up.

He said that companies are still suffering from the pandemic and lockdowns' impact, and employers should not be required to reinstate full salaries yet. He added that the government should give more time for employers to determine if full wage reinstatement is viable or not. 

Federation of Malaysian Manufacturers president Tan Sri Soh Thian Lai shared similar sentiments. He said that employers had worked hard to reduce employment-related cost-cutting measures since last year. 

MTUC's response

Employees are adamant that their employers should pay their wages in full now. Malaysian Trades Union Congress deputy president Mohd Effendy Abdul Ghani stated that employers must require employees' permission before cutting their salaries. 

He said that he was surprised that some businesses are still not reinstating their employees' wages to the original level. He urged the employees to report to the Ministry of Human Resources. 

Cutting wages without employees' consent?

According to an article by law firm MahWengKwai and Associates, employers are generally not allowed to cut employees' salaries without their consent. 

However, employers can cut the employees' wages under certain situations:

Section 24(1) of the Employment Act says that an employer cannot make any deductions from an employee's wages unless it is in accordance with the Act. Sections 24(2) to (6) stipulate how and when employers can make lawful wage deduction.

Under specific situations, the employer can only deduct wages if employees request such deductions in writing. They must also obtain prior permission from the Director-General of Labour. 

According to them, the exercise of wage deduction is seen as extreme measures and should only be the employer's last resort after trying all other cost-saving measures.

They said that the Code of Conduct for Industrial Harmony, an agreement made between the Malaysian Council of Employers' Organisations and the Human Resources Ministry, also affirmed this position. 

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