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Lynda
08/02/2021 10:21:08
Re: Fixed Monthly Allowance to be paid on or before 7th monthly

I would like to seek for clearly understanding whether fixed monthly allowance has to be paid on or before 7th of every month?

Am hired as an employee under Co.A and was paid monthly salary. On top of handling the portfolio of Co.A my employer also requires me to handle the portfolio of Co.B. For doing so, I will be paid fixed monthly allowance by Co.B with no statutory contributions. My employer will issue CP 58 to me instead of EA form from Co.B.

Based on my scenario above, does the fixed monthly allowance has to be paid to me on or before the 7th every month?

Thank you.
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klsiew
08/02/2021 18:41:38
By right allowances are to be paid together with salary. But in your case, the allowance is paid by B.

1.Does company A have to wait for company B to pay to A before paying to you?

2 What is the explanation of A for not able to pay the allowance together with your salary?

3 How late is the payment?
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Lynda
09/02/2021 10:16:41
1.Does company A have to wait for company B to pay to A before paying to you?
No. Both are same owner. Just that allowance will be paid by Company B.

2 What is the explanation of A for not able to pay the allowance together with your salary? It a planning to balance up the profit and by paying allowance, employer deemed we are like sub-contract person and not required to pay us EPF & etc,. That's why we will be given CP58 instead of EA Form. Company A & B are 2 separate Sdn Bhd company with same owner.

3 How late is the payment? Mostly I would remind employer to pay prior to 7th. Otherwise, it will be after 7th. This mth, employer whatsapp stating that cashflow tight, unable to collect debts, therefore allowance will be paid late. Therefore, am not sure when will receive.
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klsiew
09/02/2021 14:28:20
Employment Act section "19. (1) Subject to subsection (2), every employer shall pay to each of his employees not later than the seventh day after the last day of any wage period the wages, less lawful deductions earned by such employee during such wage period.

(2) Wages for work done on a rest day, gazetted public holiday referred to in paragraphs 60D(1)(a) and (b) and overtime referred to in section 60A shall be paid not later than the last day of the next wage period.

(3) Notwithstanding subsections (1) and (2), if the Director General is satisfied that payment within such time is not reasonably practicable, he may, on the application of the employer, extend the time of payment by such number of days as he thinks fit. "

Under section 19(3) of the EA as quoted above, the employer may have to explain to the Labour Department the reasons for unable to pay on time. I am not in the position to comment on their reasons like tight cashflow, debt collection etc. What you can do may be to consult the Labour Department (Jabatan Tenaga Kerja) or lodge a formal complaint against the company and let them look into the matter.
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Lynda
10/02/2021 09:11:19
May I correct my understanding. Does it means that though am treated at sub-contract, by law am still the employee of Company B and the fixed allowance has to be paid to me by 7th of each month?
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klsiew
10/02/2021 19:28:43
But they said they could not pay on time because of as you said "cashflow tight, unable to collect debts". Your understanding is correct, must be paid by 7th. Bring the matter up with the Jabatan Tenaga Kerja.
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Lynda
18/02/2021 10:31:42
Thank you for your thorough explanation. Appreciate it.
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