Amended SLO brings higher compliance costs for businesses, says Sheda advisor
KUCHING (May 3): The amended Sarawak Labour Ordinance (SLO), which came into effect on Labour Day, will increase compliance costs for businesses in the state, said Dato Sim Kiang Chiok.
The Sarawak Housing and Real Estate Developers' Association (Sheda) advisor said new employment regulations―including a reduced weekly working limit to 45 hours and extended maternity leave to 98 days―pose greater challenges to employers.
'While these measures aim to improve employee welfare and align Sarawak with international labour standards, they present substantial cost implications for employers,' he said in a statement yesterday.
Sim noted that the new requirements add to an already growing list of obligations, particularly for small and medium enterprises (SMEs).
He also pointed out that the recent minimum wage increase from RM1,500 to RM1,700, further raises fixed costs across various sectors.
'This wage hike, combined with the reduction in working hours, means businesses are now expected to pay more for less output, unless they invest in automation or absorb productivity losses,' he said.
He further noted that the federal government's plan to implement mandatory e-invoicing for all businesses by next year poses another major challenge.
He said many small traders and businesses, especially those in semi-urban and rural areas of Sarawak, lack the technical capacity and resources to transition quickly to digital invoicing systems.
'Compliance will require investments in new technology and training, which adds to the burden of already overstretched micro and small business owners.'
Sim warned that these combined changes could unintentionally dampen entrepreneurial spirit in Sarawak.
'While the objective is to modernise labour practices and ensure fair treatment, the cumulative effect of increased compliance costs could discourage business startups or expansion, reduce job creation, and shift focus away from growth and innovation.
'For sustainable development, it is crucial that policy reforms take into account the operational realities faced by local businesses,' he added. compliance Sarawak Labour Ordinance Sim Kiang Chiok slo
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