Summary. Employees have the right to request flexible work arrangements (FWA) in Malaysia as per the Employment Act Amendment 2022. Under Sections 60P and 60Q, employees can apply for flexible working hours, days, or locations, with employers required to respond within 60 days. The implementation of FWA Malaysia requires careful consideration of legal compliance, performance monitoring, and manpower planning. While these arrangements can improve work-life balance and employee satisfaction, organizations must address challenges such as managerial resistance, role compatibility, and maintaining productivity through proper documentation and systematic implementation.
If you want to implement better flexible work arrangements in 2025, you’re headed in the right direction.
According to the 2023 research paper “Flexible Work Arrangements: Experience of a Malaysian Manufacturing Company,” there’s a strong positive correlation between flexible work arrangements and employees maintaining work-life balance.
Despite that, as an employer, you might struggle to implement flexible arrangements while maintaining labor law compliance, improving productivity, and addressing the challenges of FWA Malaysia. That’s the purpose of this guide—to walk you through the details and process to help you formulate a plan of action for 2025.
Overview of Flexible Work Arrangements in Malaysia
The Employment Act defines and regulates all types of employment for employers, employees, and trade unions, but we’re mostly concerned with Sections 60P and 60Q today, as they relate to FWA Malaysia. Mainly, they grant your employees the right to request flexible working arrangements.
The Employment Act (Amendment) 2022 regulates flexible working arrangements, defining their types, application procedures, approval conditions, and the responsibilities of both parties. The main goal behind the update was to balance employee needs for work-life flexibility with business requirements, promoting greater productivity and employee satisfaction.
Relevant reading: Understanding Singapore's 2024 Tripartite Guidelines For Flexible Work Arrangements (FWA)
Key Legislations for Flexible Work Arrangements in Malaysia
Understanding the key legislations that govern FWA Malaysia will help you implement the proper procedures, keep your business practices fully compliant, and protect your business against legal action.
Section 60P (1) of the Employment Act 1955
Section 60P (1) covering FWA Malaysia allows your employees to apply for flexible working arrangements that fall under any of the classifications or combine two or more of them. Note that the agreement about FWA Malaysia should be in line with the terms and conditions of Part XII and the collective agreement (if there’s one).
Section 60Q (1) of the Employment Act 1955
Section 60Q (1) allows your employees to apply for flexible working arrangements under Section 60P in writing and in the format detailed by the Director General.
As an employer, you must either accept or reject your employee’s application within 60 days of its arrival. You must notify your employee of your decision in writing, and if you reject their application, you must state your reasons.
Ministry of Human Resources
The Ministry of Human Resources (MOHR), through Talent Corporation Malaysia Bhd (TalentCorp), together with the government, launched guidelines to support employers and employees alike on FWA Malaysia. These are part of their efforts to promote employee empowerment, manpower planning, and operational cost optimization.
These guidelines complement the Employment Act Amendment 2022. They’re essentially a user’s manual, instructing you on how to implement FWA Malaysia as stated under sections 60P and 60Q.
Additionally, MOHR will collaborate with the Department of Labour Peninsular Malaysia and TalentCorp to do more and guide businesses on the implementation of FWA Malaysia.
Malaysia’s Minister of Human Resources, Steven Sim, says, “The Ministry of Human Resources (KESUMA) will continuously review and improve our labor policies and laws to support the 3Ks, namely welfare, skills, employee performance, and to enhance the country’s economic competitiveness.”
Types of Flexible Work Arrangements
When you implement a system that supports FWA Malaysia, it’s important to consider how the types of flexible work arrangements will fit into it, those being the following:
Flexible working hours
Typically, you set the number of working hours per day or week for your employees. But if you offer flexible working hours, they have the flexibility of choosing their working hours or rest hours.
For example, you may require your employees to work eight hours a day. Some may work from 9 AM to 5 PM, while others may work from 12 PM to 8 PM. Similarly, some may take a 30-minute break, while others might take longer breaks, which means they’ll log off later than the former group.
Flexible working days
With this arrangement, you set the working hours per day or week, but employees can choose the number of working days per week.
To illustrate, you might have six working days by default. Employees can shift that to five by working extra hours daily to cover the total workweek hours. Another similar arrangement further enables them to choose which days to work.
Flexible place of work
For this model, you don’t require work from the office, enabling your employees to work from home or other locations. If they have to go to the office (but not always), you may consider instilling a hybrid work model where they only have to attend on certain days.
To exemplify, you can allow employees to work from home at all times; you can allow them to work from home unless there’s a meeting; or you can implement a hybrid system where they can work two days from home and three days at the office.
Process for Implementing FWA
When you announce FWA Malaysia policies, understanding what you’re signing up for is important. This is how the process should unfold:
Employers handling applications
As mentioned earlier, the first step is when your employee submits an application or request in writing for a certain flexible work arrangement. They provide details about the type of FWA Malaysia they want and the reason they want it.
After that, you must review their application (within 60 days) and decide to approve or reject their application. If you choose to reject, you must provide valid and justifiable reasons. If you choose to approve, you and your employee can move forward with the arrangement by drafting a written employment contract that explains the new working terms and conditions.
Employer’s responsibility after approval
Flexible work arrangements require a different management style, making setting up mechanisms to monitor the workflow under FWA Malaysia essential. You should also support your employees who have flexible work arrangements by offering a supportive environment and infrastructure.
That being said, how can you ensure that your employees are conducting their work? A good idea is to invest in project management software that tracks their work, notifying you whenever they hit a checkpoint or milestone.
That brings us to an important point: to make flexible work arrangements work, you must provide the additional support and resources for employees. Consider the following questions:
- What tools do your employees need to work remotely?
- Does your current software infrastructure support asynchronous work for your employees who don’t work the same hours?
- Do your employees have ergonomic workstations at home that support their comfort as they work for extended hours?
- Do you provide relevant mental health resources and support for employees who feel isolated during remote work?
These questions should serve as a starting point to help guide you in identifying potential issues and solutions, such as software and remote management tools that you may require for FWA Malaysia.
As for existing benefits, they should remain unaffected unless renegotiated with employees.
Read next: HR’s Guide to Remote Workforce Management
Challenges and Solutions for Managing Flexible Work Arrangements
Finally, we’ll walk you through the potential hurdles and how to overcome them so that you aren’t going in blindly and can adopt a proactive approach to the implementation of practices that support FWA Malaysia.
Resistance from managers or teams
Change is scary, so it’s expected that a sudden implementation of flexible work arrangements may be met with some resistance.
Some managers might be concerned that the efficiency might be affected as they are not able to physically oversee matters. Similarly, employees who expect quick response or turnaround time during work hours might dislike working on a different schedule from their teammates.
That’s why transition management matters, and it's key is effective communication. Outline the types of FWA Malaysia you offer and set your expectations for workload, work hours, and communication protocols. Your teams should have access to clear communication channels. Also, explain how and when they can contact their teammates and managers if working on a different schedule.
Role incompatibility
Not all roles are built equally, and some roles just aren’t compatible with flexible working arrangements. For example, some roles require you to be hands-on or online and responsive from 9 AM to 5 PM and even after. Think on-site production operators, security guards, bus drivers, and janitorial and sanitation workers.
Unfortunately, you can’t make everyone happy, but you can manage their expectations. Communicate the criteria you’re setting for flexible work arrangements, promote fairness in the implementation of FWA measures, and ensure business processes run smoothly.
Work performance
Perhaps the main concern you may have about FWA Malaysia is a decline in the quality of work performance. Yes, it becomes difficult to oversee employee performance. However, you can measure productivity and ensure accountability with the right performance review software and tracking systems.
Through those, you can track the progress of tasks and deliverables and receive real-time updates. You can also hold virtual meetings and schedule regular check-ins to stay in the loop.
Read next: Navigating the Digital Divide: Enhancing Remote Team Communication
Balancing Flexibility and Productivity in Your Organization
Managing FWA Malaysia requires meticulous documentation and compliance with legal requirements. Ensure your organization avoids penalties through proper policy implementation and automated processes.
Our centralized data management system serves as a single source of truth for all FWA policies, ensuring consistent policy implementation across your organization. Through our secure platform, HR teams can easily update, track, and distribute policy changes while maintaining detailed version histories for audit purposes.
Omni's attendance module further enables HR teams to configure timesheets that meet your company's unique needs during FWA Malaysia, giving you complete visibility into time data and streamlining timesheet approvals with customizable workflows. Overtime calculations are automatically handled based on your working hour schedules, eliminating any guesswork.
Our expert support and assistance is tailored to your business's unique requirements and local regulations. Learn how Omni can help you streamline your Malaysian workforce management and expertly navigate FWA Malaysia management to ensure compliance for your organization.
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