Thursday, September 30, 2010

Part-timers or Freelancers?

A new clause in the Employment Act 1955 is introduced in Malaysia that will take effect from Oct 1, 2010 in which part-time workers’ benefits and rights are protected. They will be entitled to EPF contributions, Socso coverage and medical entitlements based on a pro-rata basis. (Read more here)

I applaud the initiative in giving protection to part-time workers but I’m not too convinced on its ability to lessen the country’s dependence on foreign workers by increasing the participation of the latent workforce that amounts to about 6.5 million people mainly consists of housewives, disabled citizens, students and undergraduates.

If we are to ask any of the 6.5 million people who had decided not to work part-time, I fear the majority answer is not because they do not get the benefits like EPF and Socso. That probably had never even crossed their minds.

The reality is that most do not get into part-time jobs because they either simply do not need the extra income or they have other priorities that are more important in their lives at this juncture, i.e., family with young kids or studies. Using benefits to lure them to work may not be the right tool to use.

And this regulation may not augur well with employers. It simply costs too much to hire a part-time staff now.

I agree 6.5 million untapped talents are a waste but there is a better way of getting them to be involved in being part of nation building. Take housewives, for example. Their priority is their school-going children through spending time at home, cooking, building relationships and chauffeuring them to schools and places. They may have some free time in between these activities and they can be put to good use by earning some extra cash. The best work option has to be home-based, work that probably can be done via a laptop and an internet connection.



And this is the new trend and companies see the benefit of outsourcing work to freelancers – pay per job arrangements. Their freelancers are their contractors and not employees and therefore not subject to the Employment Act regulations. Now, if you are an employer, which option would you prefer?

It’s food for thought , don’t you think so?

Click here to find freelancers in Malaysia

Getting Freelancers - The Pros and The Cons

2 comments:

  1. Hi Sinsee Ho,

    could you share what are the implications of engaging a freelancer on the below condition:

    i) long term contract for services (i.e. > 1 year)
    ii) continuous renewal of contract (i.e. weekly, quarterly, yearly etc) and without a break in between.

    would the above give rise to the misclassification risk i.e. freelancer successfully making a claim for a similar benefits enjoyed by permanent staff.

    would really appreciate your views.

    ReplyDelete
  2. We need to differentiate between contract OF service and contract FOR service. Freelancers fall under contract FOR service - they are our "contractors", not employees. Terms of contract need to be spelled out correctly.

    ReplyDelete