Sweeping labour law reforms that take effect in Sabah today, 1 May, have drawn concern from both employers and workers, despite the state government’s assurance that the changes are necessary to modernise employment protections.
The Sabah Labour Ordinance (Amendment) 2025 introduces a wide range of new standards, including a reduced workweek from 48 to 45 hours, extended maternity leave from 60 to 98 days, and paid paternity leave — the first time such entitlement has been included in the state’s labour code.
The reforms also mandate that wages be paid through financial institutions, broaden the definition of employees to include part-timers, and strengthen protections against forced labour and sexual harassment.
The Sabah Labour Department says the amendments bring the state’s legal framework closer to the national Employment Act 1955, which applies in Peninsular Malaysia.
But labour groups and employers alike have raised questions about readiness, enforcement, and fairness.
“The government must not bow to employer pressure for any delay or selective enforcement,” said Catherine Jikunan, secretary of the Malaysian Trade Union Congress (MTUC) Sabah branch.
“There must be clear assistance to help educate workers and employers alike. A joint oversight committee should be established to monitor implementation and ensure accountability.”
Sabah currently has Malaysia’s highest unemployment rate, standing at 7.7%, compared to the national average of 3.2%.
With a population of around 3.9 million, its labour force participation rate is just 59%, significantly below the national rate of over 70%.
While Sabah has created over 100,000 new jobs in recent years — bringing the number of employed persons to more than 2.1 million — many work in the service and hospitality sectors, which are among those expected to be most affected by the reforms.
The Sabah Employers Association (SEA) has voiced concern that the new regulations could impose excessive strain on already fragile businesses.
“This law equalises treatment for employees across Malaysia, but unfortunately it also inequitable burdens Sabah employers,” said SEA president Yap Cheen Boon.
“Sabah’s infrastructure, logistics and market access are far behind Peninsular Malaysia. Before major changes can succeed, the business ecosystem must be strong enough to support them.”
He added that maintaining a functional labour market requires balance — and that focusing on one side of the employment equation could backfire.
The Sabah Labour Department has urged companies to review their contracts and HR practices without delay.
Workers, meanwhile, are encouraged to familiarise themselves with their rights and report violations. – May 1, 2025
