The Government has gazetted the implementation of new minimum wage of RM1,500 per month as follows:
a) For ALL EMPLOYEES as long as the employer hired at least five employees, effective 1 May 2022;
b) Eight months’ exemption for micro enterprises employing less than 5 employees;
c) Eight months’ exemption for piecemeal remuneration for micro enterprises (<5 employees);
d) Employers who carry out professional activities classified under Malaysia Standard Classification of Occupations (MASCO), regardless the number of employees, effective 1 May 2022; and
e) For ALL EMPLOYEES regardless of the number of workers, effective 1 Jan 2023
President of the National of Chamber of Commerce and Industry of Malaysia (NCCIM) and The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), Dato’ Low Kian Chuan expresses hope that the Government will consider the business community’s plea and our counter proposals to implement a gradual increase in new minimum wage.
Businesses, especially SMEs need breathing space at a time when they are increasing suffering a crippling burden from a myriad of cost pressures, including supply chain rising raw material costs, production and energy costs, and other overheads.
During the National Economic Action Council (EAC) meeting chaired by YAB Prime Minister on 25th April 2022, Monday and our meeting with YB Minister of Human Resources on Tuesday, we have raised our concerns about the wide implications arising from the steep 25%-36% rise in new minimum wage, and the significant knock-on effects on business costs and would fuel higher consumer inflation and cost of living currently faced by people.
Both YAB Prime Minister and YB MOHR have said that the Government will consider some form of measures to mitigate the impact of higher new minimum wage on business costs.
During our meeting with YB Minister of Human Resources, NCCIM has proposed two options to implement an appropriate minimum wage level in balancing between the welfare of employees and cost impact of employers. We have also emphasized to YB Minister of Human Resources that appropriate incentives as proposed in Option 2 should be given to relief SMEs’ financial burden.
(1) OPTION 1: A gradual increment in minimum wage by RM150 per month on 1 May 2022 and another RM150 per month on 1 May 2023, bringing the cumulative increment to RM300 to RM1,500 per month by 1 May 2023. No exemption be given to industries and employers, regardless of operation size.
(2) OPTION 2: If the Government insists of raising minimum wage by RM300 per month, we propose the following cost mitigating measures:
i) To increase the maximum rental or charges for accommodation to be collected by an employer from an employee by RM100 to RM200;
ii) RM150 foreign levy paid per worker be given tax rebate or deductible; and
iii) Wage subsidy of RM150 per worker for 12 months.