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Chapter 5: Payment Systems and Working Hours - Coggle Diagram
Chapter 5: Payment Systems and Working Hours
Definition of
Wage
(
Employment Act 1955
)
basic wages
and all other payments for
work done
in respect of his
contract
of service
employers to pay
7 days
after the last day of the wage period and any wages for work done on rest day, public holiday and overtime may be payable not later than the last day of the next wage period
a
written statement
showing the
total wages
earned and any
deductions
made
must
be given to the employee
Not include
: travelling allowance, reimbursement, termination benefits, annual bonus
Purpose of Wage System
to attract employees to work in the organization
to retain efficient employees
to motivate employees to perform effectively
Two Major Systems of Payment
Time-related systems
Varies with the number of hours worked (hourly, weekly or monthly)
Advantages
: easy to understand & administer, the worker is assured of a steady income
Disadvantage
: Do not motivate employees to maximize their effort
Piece-related systems
Depends on the number of units produced in a given time
Example: commission system
Disadvantage
: Quality of output may be affected
Pay Factors
Factors affecting levels of pay
Legislation and government policy
minimum wages implemented
Effective 1 February 2025, new minimum wages is RM1700
Unions
negotiate
with employers over employees' terms and conditions, including wages and other benefits
the outcome is called
collective agreement
Employment or labour market conditions
shortage of employees, competitions higher, wages offered also increasing to attract the potential employees
Factors affecting individual levels of pay
Seniority
Example: annual increment
Lead to issue of the productivity of the employees
Increase in the cost of living
Increase Cost of Living Allowance (
COLA
) or also known as subsistence allowance
Performance
Increment/ bonus
Degree of skill
The higher the skills needed, the more the employee will be paid
Reduction in Wages
A reduction in pay would be a breach of the contract of employment
Employers are not allowed to reduce or deduct the wages of employees for no reasons
If there is a mutual agreement, there should be a new contract
Employees Benefits
Eligible for benefits which is protected under the
employment Law
Employment Act 1955
Sabah Labour Ordinance 1949
Sarawak Labour Ordinance 1952
Working Hours (according to Employment Act 1955)
No employees shall work:
More than
8 hours per day
More than 48 hours per week (Max
45 hours
in the new EA amendment
2022
)
More than 10 hours per day when a
spread-over period
is involved
More than
5 consecutive hours
without a 30-minute break
At least
one rest day per week
At least
11 public holidays per year
5 must be given:
National Day
Malaysia Day
the
Agong's
Birthday
the relevant State Sultan's or Governor's Birthday
Labour Day
Systems
Normal working hours
Overtime
Shift work systems
Alternative Working Hours
Flexitime
Part-time
Teleworking