Maternity Leave in Malaysia: The March to 90 Days

Maternity Leave
                  in Malaysia:
16 October 2019

                  The March to 90 Days
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Khazanah Research Institute

Views 15/19      16 October 2019

Maternity Leave in Malaysia: The March to 90 Days

This view was prepared by Nazihah Muhamad Noor, a researcher from the Khazanah Research Institute
(KRI). The author is grateful for the valuable comments from Christopher Choong Weng Wai and Rachel
Gong. The views and opinions expressed are those of the author’s and may not necessarily represent the
official views of KRI. All errors remain the author’s own.

This work is available under the Creative Commons Attribution 3.0 Unported license (CC BY3.0)
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Attribution – Please cite the work as follows: Nazihah Muhamad Noor. 2019. Maternity Leave in
Malaysia: The March to 90 Days. Kuala Lumpur: Khazanah Research Institute. License: Creative
Commons Attribution CC BY 3.0.

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Views

Maternity Leave in Malaysia: The March to 90 Days

Introduction
The recent Budget 2020 announcement introduced a host of positive measures to promote women’s
empowerment. This Views brief focuses on one of the measures which has been the subject of some
heated discussion since its announcement: the proposal to extend paid maternity leave and why we
should do it.
More specifically, the Budget Speech announced that “the [g]overnment will review the Employment
Act 1955, which includes…increas[ing] maternity leave from 60 days to 90 days effective 2021.” This
echoes the government’s aim to extend maternity leave for the private sector as announced in the 11th
Malaysia Plan Mid-Term Review. In fact, the proposal to extend maternity leave was also announced
in the 2018 Budget.
To be clear, extending maternity leave cannot be institutionalised through the Budget. The instrument
governing legislation for work conditions including paid leave falls under the purview of the
Employment Act 1955. For the 90 days paid maternity leave to be made into law, a bill would have to
be tabled to the Malaysian Parliament where lawmakers in both Houses of Representatives and Senate
would have to agree to pass the bill. The bill must then be assented by Yang di-Pertuan Agong at
which point the bill becomes law; however, the law would not come into force until it has been
gazetted. All this to say that while the Executive branch may announce its intention to extend
maternity leave in the Budget, the Legislative branch is the one vested with the authority to make this
a reality.
It is necessary to make this distinction as it may be tempting to celebrate the announcement too
early—although the announcement signifies progress that is no doubt worthy of celebration, we must
ensure that Malaysia’s lawmakers do indeed translate this intent into reality.

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Why should our lawmakers extend maternity leave?
The Malaysian Employers Federation (MEF), in response to the Budget 2020 announcement, stated
that “Extending maternity leave from 60 days to 90 days beginning 2021 would also add further
burden on employers who are already paying 100% for the 60 days maternity leave.1” This concern
has been echoed by a number of high-profile employers in Malaysia.
However, maternity leave provisions have been suggested to have unexpected benefits for employers.
When Google (now Alphabet) increased their paid maternity leave from 12 to 18 weeks, the rate at
which new mothers quit fell by 50%. This was noted by Susan Wojcicki, the CEO of YouTube, which
is owned by Alphabet. She adds, “It may sound counterintuitive, but the research—and Google’s own
experience—shows a generous paid maternity leave actually increases retention.2” Alexis Ohanian,
cofounder of the social news site Reddit, noted that “when you consider the expense of recruitment
and training new workers, it would amount to a fantastic cost savings.3”
Yet, the US, home of YouTube, Google and Reddit, does not federally mandate paid maternity leave—
the only member of the Organisation for Economic Co-operation and Development (OECD) that
does not do so. It has been estimated that the lack of family-friendly policies is responsible for about
28 – 29% decline in women’s workforce participation in the US relative to other OECD countries4.
This emphasises the need to consider the significant economic benefits of leave provision and not just
the costs. In fact, not having maternity leave may come at a cost for the nation in the form of losses
in women’s labour force participation, as demonstrated in the case of the US.
Paid maternity leave can lead to substantial benefits for child health. Women with longer maternity
leave have been found to be more likely to breastfeed, which can support the World Health
Organization’s recommendation that new-borns should be exclusively breastfed for at least the first
six months of their lives to achieve optimal growth, development and health5. Additionally, paid
maternity leave is associated with children receiving up-to-date vaccinations6. These two factors,
breastfeeding and immunisation, are key mechanisms to promote child health. Across the world,
studies have shown that extended periods of maternity leave reduce infant mortality in all countries,
at all income levels7. In short, extended maternity leave is an effective way to invest in child health,
which ultimately translates to an investment in the future workforce of the country.

1 MEF   (2019)
2 Wojcicki (2017)
3 Beard (2019)
4 Blau and Kahn (2013)
5 Mirkovic et al. (2016) and WHO (n.d.)
6 Hajizadeh et al. (2015) and Daku et al. (2012)
7 See, for example, Nandi et al. (2016), Winegarden and Bracy (1995), and Tanaka (2005)

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Beyond maternity leave
It is perhaps notable that the Budget made no announcements on introducing paternity leave for the
private sector. Paternity leave can help promote a more equitable distribution of care work and reduce
women’s double burden of paid work and unpaid care work (see KRI’s report, Time to Care: Gender
Inequality, Unpaid Care Work and Time Use Survey for in-depth discussion on this subject).
Currently, Malaysian fathers employed in the public sector are entitled to seven days of paid paternity
leave. Meanwhile, new fathers employed in the private sector do not have any legally-mandated paid
paternity leave. Although the Ministry of Human Resources (MOHR) has proposed to amend the
Employment Act to introduce three days of paid paternity leave in the private sector, the MEF has
voiced out concerns regarding the cost of introducing paternity leave at the expense of employers.
While Malaysia is debating between introducing two, three or seven days of paid paternity leave, other
countries have moved towards family leave policies, including shared parental leave. Nordic countries
such as Finland are often cited as ideals that other countries can strive to emulate when it comes to
their paid leave policies. In Finland, mothers are given 105 days of paid maternity leave, and fathers
can take up to 54 days of paid paternity leave. In addition to these, either parent may take up parental
leave of up to 158 days, paid through the National Health Insurance Fund. After all these leave
programmes have been exhausted, parents are then entitled to take unpaid childcare leave, during
which period parents can claim from the country’s extensive childcare allowance scheme8.
Of course, introducing paternity leave alone would not be enough. For example, Japan offers 30 weeks
of fully-paid leave for new fathers; however, in 2017, only 1 in 20 (5.14%) of them took up this benefit
(up from 1.56% in 2007), according to a report published by UNICEF9. The report cited a survey
which noted that 35% of male workers with children under 3 who wanted to take paternity leave could
not. One of the most common reason given for not taking up the paternity leave provision in Japan
was an “unfavourable atmosphere” in the workplace towards taking paternity leave10. The Japan
example suggests that in addition to amending the law to accord paid paternity leave, we must also
enact social change such that fathers are not only able to take up their fair share of early-parenting
responsibilities but are actively encouraged to do so. This is admittedly easier said than done, but not
impossible—we need to look only at the “latte dad” phenomenon in Sweden11.

8 For more detailed explanation, refer to Appendix G in KRI’s report Time to Care: Gender Inequality, Unpaid Care
Work and Time Use Survey.
9 Chzhen et al. (2019)
10 Ibid.
11 The “latte dad” phenomenon refers to the trend for fathers who take on childcare responsibilities by taking advantage

of Sweden’s generous paid parental leave entitlements, sometimes frequenting cafes with other fathers carrying out the
same tasks. More on this phenomenon by Kane (2018).

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It may be easy to dismiss the Nordic models as unattainable—after all, they are much further along in
their development trajectory compared to Malaysia. However, it is worth highlighting that Iceland first
instituted their family benefit policies at a time when the country was hurtling towards the worst period
of inflation in their history, going from around 14% in the early 1970s to more than 60% at the
beginning of the 1980s, due to oil shocks that occurred in the 1970s12. Yet, it was at this time of
economic headwinds that the Icelandic government introduced a suite of family-friendly measures
which began to alleviate the care burden faced by families, primarily women, in a move towards gender
equality. This was precipitated by the events which took place on 24 October 1975, known as
“Women’s Day Off” or colloquially today as “The Long Friday”, where 90% of Iceland’s female
population did not go to their paid jobs and did not carry out any housework or childcare activities
for the entire day, in protest of women’s low pay and to show the value of female labour within and
outside the home. This led to a standstill across the country’s industries—newspapers were not printed
as the vast majority of typesetters were women; many schools were closed as the majority of teachers
were women; flights were cancelled as flight attendants did not come to work; and employers had to
make arrangements for their male employees to bring their children into work13.
The effects of The Long Friday have indelibly shaped Iceland’s public policy to one which is arguably
the most gender equal in the world. In 1976, one year after the women’s strike, Iceland passed its
Gender Equality Act, which prohibited gender discrimination in workplaces and in schools. By 1981,
while still recovering from a second wave of oil shocks, Iceland introduced three months of paid
maternity leave, some of which the mother may transfer to the father. By 1987, paid parental leave
was extended to six months14. Today, parents in Iceland are entitled to nine months of paid parental
leave, the first six months of which are equally shared between the parents, while the remaining three
months can be freely divided between them15. Iceland’s example illustrates that when countries are
made to recognise the extent of women’s contribution to care work, it is possible and even necessary
to put in place a comprehensive family benefits package not only for the sake of gender equality but
for the functioning of society itself.

12 OECD (1983)
13 Rudolfsdottir (2005)
14 Eydal and Ólafsson (2008)
15 Chzhen et al. (2019)

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Concluding remarks
Those who oppose extending parental leave may be in the position to do so because they may have
alternative options for caregiving at their disposal. Unfortunately, these people make up only a small
pool of the Malaysian population—for the rest, the only viable option may be to leave their jobs so
they can take care of their family.
The perennial issue of cost is often brought up as a barrier for financing family-friendly policies,
particularly by employers. However, this barrier is not unsurmountable. For example, if we accept the
argument put forward by employers that the cost of extended paid parental leave is too high for them
to bear, perhaps it is time for Malaysia to consider sharing some of these costs through social insurance
or state funding, as is done in countries like Finland and Iceland. For Malaysia, a possible option is to
fund (at least partially) the extended parental leave period using the Employment Insurance System
under the Social Security Organisation (SOCSO). This may be particularly pertinent to small- and
medium-sized enterprises (SMEs) which may require further support to adapt to new regulations
concerning extended paid parental leave, including suitable transition periods for SMEs.
Without family-friendly policies, more and more of the country’s workforce, especially women, may
have to drop out of the labour market to carry out their care responsibilities to cope with the rising
care burden. This may come at the expense of the country’s economic growth resulting from losses
from the potential contributions of this group of workers. Not only that, employers may also suffer
as they would then have to incur the cost of training new hires to replace the previous ones. Ultimately,
it would be a loss for our society, as this would continue to signal that we do not value our caregivers,
sacrificing their well-being in exchange for profit-maximisation. Is this the New Malaysia we wish for?

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References
Beard, Alison. 2019. Every Employee Should Have Access to Paid Parental Leave. Harvard Business Review.
https://hbr.org/2019/09/every-employee-should-have-access-to-paid-parental-leave.
Blau, Francine D, and Lawrence M Kahn. 2013. Female labor supply: Why is the United States falling behind? American
Economic Review 103 (3):251-256.
Daku, Mark, Amy Raub, and Jody Heymann. 2012. Maternal leave policies and vaccination coverage: A global analysis.
Social Science & Medicine 74 (2):120-124.
Hajizadeh, Mohammad, Jody Heymann, Erin Strumpf, Sam Harper, and Arijit Nandi. 2015. Paid maternity leave
and childhood vaccination uptake: Longitudinal evidence from 20 low-and-middle-income countries. Social Science & Medicine
140:104-117.
MEF. 2019. MEF: Malaysians@Work initiative should work. Malaysian Employers Federation.
Mirkovic, Kelsey R, Cria G Perrine, and Kelley S Scanlon. 2016. Paid maternity leave and breastfeeding outcomes. Birth
43 (3):233-239.
Nandi, Arijit, Mohammad Hajizadeh, Sam Harper, Alissa Koski, Erin C Strumpf, and Jody Heymann. 2016.
Increased duration of paid maternity leave lowers infant mortality in low-and middle-income countries: a quasi-experimental study.
PLOS Medicine 13 (3):e1001985.
Tanaka, Sakiko. 2005. Parental leave and child health across OECD countries. The Economic Journal 115 (501):F7-
F28.
WHO. n.d. "Breastfeeding." Accessed 14 October 2019. https://www.who.int/topics/breastfeeding/en/.
Winegarden, Charles R, and Paula M Bracy. 1995. Demographic consequences of maternal-leave programs in industrial
countries: evidence from fixed-effects models. Southern Economic Journal:1020-1035.
Wojcicki, Susan. 2017. "Closing the Tech Industry Gender Gap." The                                         Huffington      Post.
https://www.huffpost.com/entry/tech-industry-gender-gap_b_9089472?1453912334=.

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