Malaysia threatens penalties for failing to comply with minimum wage Malaysia threatens penalties for failing to comply with minimum wage

Malaysia threatens penalties for failing to comply with minimum wage
26 Jun 2018

Malaysian businesses have been told that if they fail to pay the new minimum wage and recently introduced employers’ levy they could face fines or imprisonment.

Human resources minister M Kulasegaran said companies have until the end of June to register with the Human Resources Development Fund (HRDF) to provide their details and contribute to the employers’ levy. Meanwhile, a new minimum wage regime is expected following the country's recent dramatic change of government.

The employers' levy is mandatory for employers with 10 or more Malaysian employees in the fields of manufacturing, mining, quarrying, plus other sub-sectors of the service industry.

The purpose of the levy, which amounts to 1% of collective monthly wages, is to invest in workers' training and skills development. Kulasegaran said that approximately 23,000 of the 45,750 employers that are eligible to register have yet to sign up.

"The ministry will not hesitate to take those who haven’t registered or [who have] defaulted to court,” he said. “We will give them until the end of this month to make the necessary contribution."

Any employer that fails to register is liable to receive a fine of RM10,000 (US$2,508) and could be imprisoned for up to one year.

Kulasegaran said he hoped to avoid taking employers to court. "This is the last resort," he said. He added that employers experiencing financial difficulties could contact the HRDF and the Ministry to see what could be done to help.

The move comes as the incoming Parti Rakyat Sarawak government said that employers must comply with new minimum wage regulations.

According to the CIPD Asia, the monthly minimum wage in Peninsular Malaysia is currently RM1,000 (US$251), dropping to RM920 (US$230) in Sarawak and Sabah. Doris Sophia Brodie, political secretary to the chief minister, said she was hopeful that a manifesto pledge to increase the minimum to RM1,500 (US$376) would come to fruition.

"I am certain those working at coffee shops and supermarkets are looking forward that the proposed minimum wage will materialise," she said.

Brodie added that employees could lodge a complaint to the relevant authorities if their employers did not comply.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Malaysian businesses have been told that if they fail to pay the new minimum wage and recently introduced employers’ levy they could face fines or imprisonment.

Human resources minister M Kulasegaran said companies have until the end of June to register with the Human Resources Development Fund (HRDF) to provide their details and contribute to the employers’ levy. Meanwhile, a new minimum wage regime is expected following the country's recent dramatic change of government.

The employers' levy is mandatory for employers with 10 or more Malaysian employees in the fields of manufacturing, mining, quarrying, plus other sub-sectors of the service industry.

The purpose of the levy, which amounts to 1% of collective monthly wages, is to invest in workers' training and skills development. Kulasegaran said that approximately 23,000 of the 45,750 employers that are eligible to register have yet to sign up.

"The ministry will not hesitate to take those who haven’t registered or [who have] defaulted to court,” he said. “We will give them until the end of this month to make the necessary contribution."

Any employer that fails to register is liable to receive a fine of RM10,000 (US$2,508) and could be imprisoned for up to one year.

Kulasegaran said he hoped to avoid taking employers to court. "This is the last resort," he said. He added that employers experiencing financial difficulties could contact the HRDF and the Ministry to see what could be done to help.

The move comes as the incoming Parti Rakyat Sarawak government said that employers must comply with new minimum wage regulations.

According to the CIPD Asia, the monthly minimum wage in Peninsular Malaysia is currently RM1,000 (US$251), dropping to RM920 (US$230) in Sarawak and Sabah. Doris Sophia Brodie, political secretary to the chief minister, said she was hopeful that a manifesto pledge to increase the minimum to RM1,500 (US$376) would come to fruition.

"I am certain those working at coffee shops and supermarkets are looking forward that the proposed minimum wage will materialise," she said.

Brodie added that employees could lodge a complaint to the relevant authorities if their employers did not comply.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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