It is part of the ministry’s effort to increase the workers’ compensation rate to 40% of the country’s GDP under the direction of 12MP

by NURUL SUHAIDI / TMRpic

THE number of employers who implemented the Productivity Linked-Wage System (PLWS) has increased to 10.7% from the total number in 2018, according to the Ministry of Human Resources (MoHR).

Minister Datuk Seri M Saravanan said he is hoping more employees will implement the model to increase productivity and balance the wages, especially among the small, medium and large enterprises.

“Despite slow adoption previously, this is a significant increase and we hope more companies are aware and utilise the system to maximise their productivity as the economy now is recovering swiftly,” he said to media during the PLWS Award Programme closing ceremony.

He added that the programme is part of the ministry’s effort to increase the workers’ compensation rate to 40% of the country’s GDP under the direction of the 12th Malaysia Plan (12MP).

PLWS offers various incentives under the variable component which is given based on the employees’ productivity.

That includes components such as a piece-rate system, attendance incentives, service charge and skills allowance.

“Through the implementation of this performance-based remuneration system, the company not only can increase their productivity, but also reduce the ‘rework’ cost, enabling them to gain more revenue,” he added.

He said the system also applies to foreign workers in the participating companies regardless of the industry.

Until June 2022, a total of 94,014 companies have implemented PLWS compared to 84,922 companies in 2018.

Saravanan noted that the ministry is also investigating the recent report regarding companies that defy the minimum wage rule, and upon being found guilty, it can be penalised with RM10,000 per employee.

He reiterated the commitment to ensure companies are in compliance with the new regulations while ensuring the employee benefits are reached.

PWLS Award Programme recognised 15 companies under small, medium and large enterprises as winners as they presented their best PLWS models which combine criteria such as productivity and profitability.

“We also want more concerted effort among the sector to widen the implementation of PWLS to ensure wages are aligned with their productivity,” Saravanan concluded.