Malaysia to introduce sector-based minimum wage policy Malaysia to introduce sector-based minimum wage policy

Malaysia to introduce sector-based minimum wage policy
12 Jul 2018

The Malaysian government is to introduce a new sector-based minimum wage policy for the private sector, replacing current blanket regulation for all industries.

HR Minister M Kulasegaran said the Ministry would table a proposal to the Cabinet in mid-July, following in-depth discussions with industry and related stakeholders. The minimum wage increase to RM1,500 (US$370.51) per month will be carried out in stages, Kulasegaran told The Malaysian Reserve

"I have told the relevant stakeholders that it has to be sectoral-based. That means the plantation industry will have a different minimum wage, while the manufacturers take a different minimum wage," he said. "I think it will be unrealistic to increase the minimum wage to RM1,500 directly. We will do it in stages."

Kulasegaran indicated that he had experienced some resistance from industry during the discussions. But he added: "The Ministry puts forward a figure more or less... after some give and take, consultations and a bit of haggling, we reached a reasonable figure."

An even bigger challenge is to balance minimum wage policy between Peninsular Malaysia and East Malaysia, Kulasegaran said. But the Ministry was working on a proposal to be presented to Cabinet on mechanisms aimed at balancing minimum wage rates in Borneo’s Sabah and Sarawak with Peninsular Malaysia. The minimum wage rate is currently RM1,000 (US$247) per month in Peninsular Malaysia and RM920 (US$227) for Sabah, Sarawak and Labuan.

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.

 

The Malaysian government is to introduce a new sector-based minimum wage policy for the private sector, replacing current blanket regulation for all industries.

HR Minister M Kulasegaran said the Ministry would table a proposal to the Cabinet in mid-July, following in-depth discussions with industry and related stakeholders. The minimum wage increase to RM1,500 (US$370.51) per month will be carried out in stages, Kulasegaran told The Malaysian Reserve

"I have told the relevant stakeholders that it has to be sectoral-based. That means the plantation industry will have a different minimum wage, while the manufacturers take a different minimum wage," he said. "I think it will be unrealistic to increase the minimum wage to RM1,500 directly. We will do it in stages."

Kulasegaran indicated that he had experienced some resistance from industry during the discussions. But he added: "The Ministry puts forward a figure more or less... after some give and take, consultations and a bit of haggling, we reached a reasonable figure."

An even bigger challenge is to balance minimum wage policy between Peninsular Malaysia and East Malaysia, Kulasegaran said. But the Ministry was working on a proposal to be presented to Cabinet on mechanisms aimed at balancing minimum wage rates in Borneo’s Sabah and Sarawak with Peninsular Malaysia. The minimum wage rate is currently RM1,000 (US$247) per month in Peninsular Malaysia and RM920 (US$227) for Sabah, Sarawak and Labuan.

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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