Chinese employers in Malaysia are choosing to hire more men than women to compensate for hours lost due to the newly expanded maternity leave policy enacted by the government, according to a survey from the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM).

Malaysia’s Employment Act 2022 which took effect 1 January 2023 expanded paid maternity leave from 60 days to 90 days for female workers and included seven days of paid paternity leave for male workers. It also included other changes like reduced working hours from 48 to 45 per week.

“We observe that respondents have indicated a shift to a higher male-to-female ratio in their employment (41.3%) to mitigate against the impact of higher maternity leave. This does not bode well for encouraging women’s participation in the labour force and promoting gender equality,” the report from the Associated Chinese Chambers of Commerce and Industry of Malaysia said.

The ACCCIM conducted a survey of 761 businesses, 44.9% of which said they felt a high impact in the new maternity leave policy, 40.4% felt a moderate impact, while only 14.7% said the policy had no impact to their business operations.

In addition to maternity leave, the report indicated other moderate to high impacts to their operating costs as a result of the amendments from the Employment Act, such as a reduction in working hours, higher threshold for overtime payment, and widened coverage for all employees.

With working hours now reduced from 48 to 45 hours per week, an overwhelming majority of businesses at 80% say they expect to see higher employment costs.

To mitigate the impacts of the amendments, respondents called for more support from the government, such as subsidizing the additional days of maternity leave or a phased-in approach so businesses could prepare for potential costs of implementing the amendments.