Latest Update on New Minimum Wage
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Human resources minister M Saravanan expects the government to introduce a minimum salary of "about RM1,500 a month" before the end of the year.
He claimed that the new tariff had not yet been finalised since the ministry was waiting for Cabinet clearance. He stated that he could not reveal the precise minimum pay figure proposed by the human resources ministry, but it is approximately RM1,500 and lower.
In February 2020, the government raised the minimum salary from RM1,100 to RM1,200 per month.
Although the government had not adjusted the minimum wage in recent years, Saravanan said that certain firms, particularly in the private sector, had taken the initiative to provide greater rates.
He said that some employers provide not only the minimum salary but also other perks such as housing and improved welfare.
MEF disagrees with the minimum wage increase
The Malaysian Employers Federation (MEF) stressed that it is not the right time to raise the cost of doing business and that the proposed RM1,500 higher minimum wage would hamper economic recovery.
According to President Datuk Syed Hussain Syed Husman, most Malaysian businesses are not ready to implement the proposed new minimum wage as they are still reeling from the economic shock caused by Covid-19 and the impact of the recent floods.
He said that more efforts should be put at private-sector company recovery and reducing rising product and service costs. He stressed that the majority of Malaysian businesses are micro, small, and medium enterprises (MSMEs), accounting for 98.9% of all businesses.
Syed Hussain said that the RM1,500 minimum wage would increase the price of products and services, as well as operating costs. He added that since local workers already receive salaries greater than the minimum wage, the RM1,500 minimum wage would primarily go to foreign labour, raising the outflow of money.
He also believes that an employee whose current salaries are considerably over the minimum wage will be demotivated if their salary is not increased.
MTUC pushes for an earlier increase of minimum wage
The Malaysian Trades Union Congress (MTUC) has requested Putrajaya to raise the minimum wage by the second quarter of this year rather than the end of 2022, as it was previously planned.
While MTUC deputy president Effendy Abdul Ghani applauded plans to raise the minimum wage from RM1,200 to RM1,500, he questioned why it would take till the end of the year to do so. According to him, the raise should be completed by the second quarter of 2022.
Effendy said that since the change of government in 2020, the tripartite National Labour Advisory Council (NLAC) encompassing employees, employers, and the federal government has yet to meet.
After the economic shocks caused by the virus and the recent floods, Effendi questioned the Malaysian Employers Federation's claim that the minimum wage rise would destroy businesses. According to him, the MEF's argument is similar to what it claimed when the government implemented the minimum wage in 2012, warning that many small-time enterprises would be forced to close their doors.
He also asked how many small and medium-sized businesses had been forced to close due to the minimum wage. He claimed that since then, the number of small enterprises has increased.
He believes employers are aware that, as required by the National Wages Consultative Council Act 2011, the minimum wage would be changed every two years, and as a result, all employers should be prepared.
Effendy stated that the living cost is very high, and it's time for the government, through the NLAC, to discuss a living wage and move away from the minimum wage.