New minimum wage of RM 1,700: A baseline, not an entry-level salary - MEF
Minimum wage of RM 1,700 set to support micro, small, and medium enterprises.
SHAH ALAM - The Malaysian Employers Federation (MEF) commended the government's decision to set the new minimum wage at RM 1,700, recognising the complexities faced by micro, small, and medium enterprises (MSMEs).
MEF also encouraged businesses with the means to offer salaries above the base rate to do so.
Its president Datuk Dr Syed Hussain Syed Husman highlighted that the minimum wage serves as a baseline, not an entry-level salary for graduates or skilled workers, and is applicable nationwide, including in Sabah and Sarawak.
“MEF is thankful to Datuk Seri Anwar Ibrahim and the government for considering the hardships faced by Micro, Small and Medium Enterprises (MSME) in determining the new minimum wage rate of RM 1,700.
“Additionally for allowing a reasonable grace period for employers, especially for micro-enterprises with fewer than five employees, to implement this change,” he told Sinar Daily when contacted today.
He further thanked the Human Resources Minister Steven Sim for his close engagement with stakeholders, which allowed him to understand the challenges faced by employers and workers on the ground.
MEF also expressed gratitude to the National Wages Consultative Council (NWCC) for guiding discussions among its members and facilitating a consensus on the minimum wage rate.
Syed stressed that the new minimum wage was finalised after a detailed review of proposals submitted by the NWCC, which is a tripartite body made up of civil servants, employees, and government representatives.
The wage adjustment for businesses with fewer than five employees was postponed until January 1, 2023, when the minimum wage of RM 1,500 became mandatory nationwide.
He stated that it is vital for stakeholders to understand that most Malaysian businesses are Micro-, Small and Medium-sized Enterprises (MSMEs) and that even within this sector, there are significant differences between urban and rural enterprises.
“Minimum wage is rarely a challenge for larger organisations such as multinational corporations (MNCs), government-linked companies (GLCs), and Government-linked investment companies (GLIC), but the real burden falls on MSMEs,” he added.
Syed reiterated that the new minimum wage of RM 1,700 is just the starting point, with most employers already compensating above this rate.
He urged businesses that can afford higher salaries to do so, emphasising that minimum wage should not be used as a benchmark for paying the lowest possible rates.
“No one should use the minimum wage as an excuse to underpay employees. It is only ethical for employers to reward their workers according to their performance and contribution to the company,” he added.
