Pay Employee Salaries Via Bank Accounts: MOHR
Minister of Human Resources, V Sivakumar, has urged employers in Malaysia to ensure that the payment of wages to all their employees whether local or foreign must be paid through bank accounts. This directive aligns with the guidelines outlined in Section 25 and 25(A) of the Employment Act 1955 [Act 265]. Cash or cheque payments of wages are permissible only upon the explicit request of the employee and with prior approval from the Director General of the Department of Labour of Peninsular Malaysia, as specified in Section 25A(1) of the same act.
Minister Sivakumar cautioned that any employer who does not make salary payments through the bank account as stipulated is considered to have committed an offence and if convicted may be fined not more than RM50,000.
“The instructions for paying wages through bank accounts have long been stipulated in Act 265,” Sivakumar added.
The Minister’s reminder was prompted by concerns related to forced labor, which has been a significant issue. Allegations have surfaced indicating that certain workers, particularly foreign laborers, have either not received their wages or have experienced delayed payment under involuntary conditions. It’s important to note that delayed or unpaid wages are classified as one of the elements contributing to forced labor, as defined by the International Labor Organisation (ILO).
The Ministry of Human Resources (MOHR) has outlined that ensuring employer compliance with the practice of making wage payments through bank accounts will serve as a monitoring mechanism for the government. This, to a degree, is anticipated to mitigate allegations of forced labor. MOHR stated that adherence to this legal requirement is particularly crucial for employers engaged in exporting goods. Those found guilty of participating in forced labor practices could face penalties, and their products might be barred from entering the markets of importing countries. This not only impacts the reputation of the company but also has broader implications for the nation’s global standing.
Therefore, MOHR is urging employers to consistently adhere to the prevailing laws and regulations. The enforcement efforts by the various departments and agencies operating under MOHR will remain aligned with the stipulated legislation and jurisdiction.
This enforcement needs to be done continuously to ensure that the welfare of the workers is preserved and the harmony of the country’s labor continues to be strengthened and eradicate any forced labor practices in the country.
