New minimum wage to be known by August

Minister expresses optimism on the wage pledge, but there is a need for discussion with industry stakeholders


The new minimum wage policy revision has been completed and it may be announced by August this year, said Manpower Minister M Kulasegaran (picture).

Kulasegaran said the revision on the ruling coalition’s RM1,500 minimum wage pledge for the private sector workers has been finalised, with final consultation process to take place soon.

He said the minimum wage quantum for the private sector will be announced latest by August, after getting the approval from the Cabinet and relevant stakeholders.

“Today, I can only announce that the new minimum wage rate for private sector workers is in the process of being reviewed, and if it gets the approval and agreement, will be announced by the government, latest in August this year,” he told reporters after the ministry’s monthly assembly yesterday.

“We have put the upper limit at RM1,500 in our manifesto. We will definitely achieve that figure, but that quantum of increase for now is being discussed by all parties.

The minister expressed optimism that Pakatan Harapan’s manifesto pledge on the wage can be fulfilled, but he maintains that there is a need for discussion with the industry stakeholders, including workers and employers’ unions, and the Cabinet’s approval.

“So as I said on the 13th (of May), we will call all of them; the stakeholders — the unions, the employers and others — and the government for engagement,” Kulasegaran said.

The government, he said, has to be cautious in implementing the pledge, as it should not lead to a crisis where businesses are forced to shut down, thus resulting in unemployment.

“I, as a minister, will have discussions with as many people as possible, in trying to achieve the best results,” he added.

In its election manifesto, Pakatan Harapan pledged to equalise and increase monthly minimum wage to RM1,500 by the end of the first term and reviewable every two years, with the government to contribute half of the pay hike.

The current minimum wage for the private sector is RM1,000 in Peninsular Malaysia and RM920 in East Malaysia.

Meanwhile, Kulasegaran said “many” employers may face stern actions for violating immigration laws by hiring illegal foreign workers.

He said the government now means business, and his officers have already begun cracking down on businesses which employ illegal workers for their operation.

“You will soon hear that many employers will be charged for violating the laws,” he said, adding that the government has increased enforcement efforts to weed out illegal workers in the country.

Last week, The Malaysian Reserve reported that plantation companies plan to state their opposition to the government’s plan to increase the minimum wage to RM1,500 from the current RM1,000 in order to mitigate adverse financial and business consequences.

Sime Darby Plantation Bhd (SD Plantation) executive deputy chairman Tan Sri Mohd Bakke Salleh said industry players, who are members of the Malaysian Palm Oil Association, are currently working on a submission to the government for a reconsideration or review to the proposed new minimum wage level.

“Hopefully, this will not be made mandatory for plantation companies, otherwise we will certainly face adverse financial consequences,” he said.

From SD Plantation’s point of view, Mohd Bakke said the company’s labour cost is expected to increase to 35% of total production cost, from the current 26%, should the minimum wage level be raised.