By DayakDaily Team
KUCHING, May 2: While the recent amendments to the Sarawak Labour Ordinance mark a significant shift in employment regulations, they also come with increased compliance costs for businesses operating in the State.
In a statement, Sarawak United People’s Party (SUPP) Stakan branch chief Dato Sim Kiang Chiok noted the reduction in maximum weekly working hours from 48 to 45 hours and the extension of maternity leave from 60 to 98 days.
He explained that while these measures aim to improve employee welfare and align Sarawak with international labour standards, they present substantial cost implications for employers.
“For small and medium-sized enterprises (SMEs) in particular, these new requirements add to an already growing list of business obligations. Most notably, the minimum wage was recently raised from RM1,500 to RM1,700 per month, further increasing the fixed costs for employers across various sectors.
“This wage hike, coupled with the reduction in permissible working hours, means businesses are expected to pay more for less output unless they invest in automation or absorb the productivity losses,” he said.
Furthermore, said Sim, the federal government’s upcoming implementation of mandatory e-invoicing for all businesses by 2026 presents another major challenge.
“Many small traders and businesses, especially in semi-urban and rural Sarawak, lack the technical capacity and resources to adapt quickly to digital invoicing systems. Compliance will require investment in new technologies and training, creating a burden for already overstretched micro and small business owners,” he said.
Sim went on to say that these changes may unintentionally dampen the entrepreneurial spirit in Sarawak.
He acknowledged that while the objective is to modernise labour practices and ensure fair treatment, the cumulative effect of increased compliance costs could discourage business startups or expansion, reduce job creation, and shift focus away from growth and innovation.
“For sustainable development, it is crucial that policy reforms consider the operational realities faced by local businesses,” he said.
The amended Sarawak Labour Ordinance came into force on Thursday (May 1).
In addition to longer maternity leave and reduced weekly working hours, other key amendments include broader employee coverage whereby legal protections are now extended to all employees regardless of salary or job category, seven days of paternity leave for eligible working fathers, the introduction of flexible work arrangements, improved worker accommodation standards, as well as anti-discrimination provisions that gives workers the right to report discriminatory practices in the workplace. — DayakDaily
