The private sector minimum wage will be RM900 and RM800 per month for the peninsula and east Malaysia, respectively, Datuk Seri Najib Razak announced tonight.
The prime minister also said employers will be given six months to meet what he called a “game-changer to transform the labour market”, although “micro-enterprises” will be given a year.
“So the minimum wage will not burden employers or see workers losing out, part of allowances or fixed cash payments will be allowed in calculating the minimum wage,” he said on the eve of Labour Day.
He added that the minimum wage for all states would be equalised within three years.
“The minimum wage is not static. It will be reviewed from time to time, according to the capability, productivity and [competitiveness] of the nation,” the Umno president said.
The policy will take effect once it is gazetted, which stakeholders say will happen within a few weeks as the matter is already before the Cabinet.
Early this month the employers and workers had argued in a recent National Wages Consultative Council (NWCC) meeting over whether allowances and other benefits can be included as part of a base wage.
The committee, which advises the government on wage policy, had after small-medium industries (SMIs) warned that 80 per cent of active businesses could fold under a blanket wage floor, cutting four million jobs from the labour market.
Putrajaya had initially aimed to announce a base wage policy by the end of last year but the various stakeholders refused to come to an accord.
Najib was then slated to announce a minimum wage amount last month, after the NWCC made enough headway to agree on a floor figure.
This pressure from employers had forced the government to return to the negotiating table despite the risk of upsetting trade unions, which have said that a minimum wage is long overdue.
Also reported that the 16 mainly Chinese industry associations that called a press conference on March 6 to ask for a staggered implementation of floor wages, had first sought out MCA president Datuk Seri Dr Chua Soi Lek for help before lobbying Putrajaya directly.
The Barisan Nasional (BN) government, which has been unable to win back Chinese support so far, has since held several meetings with the associations that are largely made up of SMIs.
SMIs say they make up 99 per cent of operational companies and employ 59 per cent of all workers as they are the most labour-intensive outfits and will be hardest hit by a hike in wage bills.
Bloomberg reported last month that government officials are preparing for June 3 federal polls and Najib would announce a minimum wage of just under RM1,000 a month to win support from low and unskilled labour that makes up 75 per cent of the workforce.
Households earning under RM1,500 per month also make up 40 per cent of the population.
Najib added today that the policy will cover all private sector workers aside from domestic workers.
Professional firms such as dental and medical clinics as well as law and architectural practices will not be allowed the extra six months afforded to “micro-enterprises.”
Why was he nervous during delivery of his speech for this ?
Seems like he is under a lot of pressure.
His body language shows.
Why the disparity? Don't tell me all the essential goods in East Malaysia are cheaper? Do the people in these two states only take two meals a day? And why take another 3 years to match the wages in the peninsular?
Is the Prime MInister trying to insult Malaysian workers? What coukld anyone do with RM900 and 800 respectively? Workers are not cheap commodity for trading. The minimum wage should have been at least RM1500.00 for the lowest skill workers. It is shocking and insulting to see the PM grand standing on his RM 800 and 900 announcement.
Costs of living in Sabah is much higher than many parts of Peninsular Malaysia yet the minimum wage as announced by the PM showed that workers in Peninsula Malaysia are getting more than their counterparts in Sabah. Prices of houses in Sabah for example, are the second highest after Kuala Lumpur. Food and beverages too are very high compared to many states in Peninsula Malaysia. I dont understand why BN always treat Sabahans as second class citizens
because he knows that Sabah is BN's Fixed deposit in the coming election.So he doesn't care about Sabahans because he knows they will still vote for BN in the coming elections.Time to grow up,Sabahans.
The announcement is merely to divert the negative impact or attention of the Bersih 3.0 .
One can see that tomorrow those main media will focus all report on Minimum wage rather than the impact or consequences of Bersih 3.0 ...