News & Events
02 May 2012


2 May 2012

Workers in Malaysia celebrate Labour Day knowing the minimum wage that will be paid to
workers in the private sector, which will be RM900 per month for employees in the Peninsula
and RM800 for those in Sabah, Sarawak and the Federal Territory of Labuan.

Prime Minister Datuk Seri Najib Tun Abdul Razak when revealing details of the minimum wage
on 30 April 2012, said it complements the National Transformation Policy that is meant to drive
Malaysia towards becoming a high-income nation.

With some exceptions, this will be implemented in six months after the Minimum Wages Order
is gazetted. Finally, Malaysia will have a minimum wage policy in place.

However, the minimum wage policy is not a guarantee of better things to come. It has to be
matched with hard work, innovation and vigilance. Labour productivity has to improve
consistently across the board.

Employers had, naturally, been lukewarm about Malaysia having a minimum wage policy. But
the sooner the employers understand the overall benefits of minimum wages, the better.

Malaysia cannot be a develop nation if a significant portion of its workers have salaries that keep
their household income below the poverty line.

A high-income economy does not rely on low-cost labour to speed up progress. Instead, it is
prompted by ideas and value enhancement.

Business owners have to learn to plan and strategise better and they have to fully appreciate that
competitiveness is not only about being cheaper. This is going to be a big challenge to them.

The workers unions, on the other hand, have welcome the Government’s announcement of the
minimum wage. However, they would ask the Government to introduce the RM300 as cost of
living allowance (Cola) for private sector workers, which is now enjoyed by the civil servants.

Other than that, the workers unions were seeking to reduce working hours from 48 hours per
week to 40 hours a week, capping the retirement age at 60 years with the benefits for the private
sector workers, setting up compulsory child care centres at the workplace and abolition of the
contract system.

The Government will set up a committee to make adjustments to the minimum wage system for
certain industries, Human Resources Minister Datuk Seri Dr. S. Subramaniam said. The
committee is needed to address specific issues which might arise from the absorption of some of
the fixed allowances into the salary.


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