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OVERTIME RATE

mrslim
Member
Mon, 28 Apr 2014 01:09:07 PM  (Last updated: Tue, 29 Apr 2014 10:30:52 AM)

Good afternoon. We are in the retail industry and had complied to the min wage effective 1.1.2013. We have tried out No OT arrangement in oder to overcome the additional cost incurred.  However, seniors whose salaries have not been adjusted accoring to the increament % as the juniors were affected in their take home pay.

In Feb 2013, the management has decided to add in some "allowance" for these seniors to subsidise their income.

In May 2013, the no OT policy has to be scrapped because of our business nature, we do need staffs to work OT. 

Since we considered the allowance as "subsistence allowance" which is excluded under "wages" , therefore it was not taken into consideratio for OT calculations.  (We do pay EPF and SOCSO for them as an additional perks).

Please advise if what we have done comply to the Labor Law.

Thank you.

mrslim

KL Siew
Administrator
Mon, 28 Apr 2014 02:23:04 PM

1. I am not so sure about this so-called "subsistence allowance" mentioned by you. Seek clarification from the Labour Office. This term was used in the past when governrment employees were paid such allowance (COLA) and the private sectors followed suit. I am not sure whether the terms is still used or not.

2. You have to consult EPF, SOCSO about those additional perks.

mrslim
Member
Mon, 28 Apr 2014 05:06:34 PM

Dear KL Siew, thank you for your reply. For your information, the term "subsistence allowance" could be found in pg 18 clause no. 3 of Guidelines on the Implementation of The Minimum WAges Order 2012:

http://www.mohr.gov.my/pdf/imwg021012.pdf

Appreciate your assistance.

mrslim 

KL Siew
Administrator
Tue, 29 Apr 2014 08:59:01 AM

But, the term was never mentioned in the Minimum wages Order. The term  'subsistence allowance' is only mentioned in clause 3 in the First Schedule of the EA.

"3. For the purpose of this Schedule “wages” means wages as defined in section 2, but shall not include any payment by way of commission, subsistence allowance and overtime payment. "

But it is only for the purpose of the First Schedule. For other calculations like overtime, holiday pay, rest days pay etc, this allowance may still be in. However, for your case for those senior staff, you can use allowance of any name because they are most likely not covered by the EA. But for those covered by the EA, that allowance may be included, whatever name you may use.

That's why I asked you to seek clarification from the Labour Department.

mrslim
Member
Tue, 29 Apr 2014 10:30:52 AM

Thank you. :)

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