Construction industry seeks 12-month grace period to comply with Act 446

THE construction industry is appealing to the Government to allow a one-year grace period on the enforcement of the latest amendments to the Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446).

This follows the issuance of a joint media statement by the:

  • Master Builders Association Malaysia (MBAM);
  • Malay Contractors Association Malaysia (PKMM);
  • Bumiputera Contractors Association Malaysia (PKBM);
  • Indian Contractors Association Malaysia (PKIM)
  • Guild of Bumiputra Contractors Wibawa (GBC Wibawa); and
  • United Malaysia Contractors Association (UMCA)

“While we commend the initiative to provide a conducive living space for workers, the amendments to Act 446 which was gazetted on Feb 17 as part of the Emergency Ordinance took place at a rather inaccurate time while taking into account the unfavourable economic situation,” the joint statement pointed out.

“The rising of construction costs and SOPs (standard operating procedures) compliance costs have caused cash flow problems and financial constraints for contractors. There is a need of sufficient time for the industry to recover.”

Under the new law, if employers are unable to provide proper housing facilities for workers in accordance to Act 446, they are required to provide temporary accommodation which costs RM270 per worker.

“In a total lump sum per construction site, the accumulated amount to be paid by employers will be quite hefty,” the six construction associations noted.

For failure to comply with the new law, both the employers and accommodation providers can be fined RM200,000 or jailed for up to three years or both.

“This amended fine during the current weak economic situation amid the COVID-19 pandemic will seriously disrupt the industry’s revival initiatives,” stressed the associations.

 “The new enforcement of Act 446 is also putting contractors under a dark tunnel as the delegation of enforcement powers under the Emergency Ordinance can face the potential of misinterpretation of law due to the lack of understanding by the many different authorities.”

As it is, different local councils and authority agencies – even within the same state – may have different set of rules and guidelines. – Feb 25, 2021

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