Minimum wage increase: Employers unhappy, workers give thumbs up

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PETALING JAYA: Employers, as expected, are unhappy with the new minimum wage rate announced yesterday, but employees, also as expected, welcome it.

While the Malaysian Employers Federation (MEF) today criticised the “sudden” increase to RM1,100 per month and a lack of inconsistency, the Malaysian Trades Union Congress (MTUC) welcomed it but said it could have been higher.

MEF executive director Shamsuddin Bardan was unhappy with the government for suddenly announcing the new minimum wage rate without consulting stakeholders as it put a lot of burden on the employers.

“The announcement is made less than two months after the last announcement on minimum wage in September. Now, we are not sure of what is going to happen; the government may announce another new rate in the nearest time.

“For businesses, we need consistency and also finality, we cannot have this kind of thing, as it is not good for investments to come in,” he told FMT.

The government announced the new minimum wage of RM1,100 per month for the whole country starting Jan 1 in its first budget tabled in Parliament yesterday.

In September, Putrajaya had fixed the new minimum wage nationwide at RM1,050 or RM5.05 sen per hour and had said it would take effect from Jan 1 next year.

Shamsuddin said the government should be firm and consistent in making any decision as otherwise, it would erode the confidence of investors.

“It’s a surprise for us and will create a bad precedent because the government can’t just make announcements like that without consulting with us. A firm policy is needed rather than a flip-flopping decision.”

He said the employers might have no choice but to abide by it, adding that he was more concerned for employers in Sabah and Sarawak.

“This will hurt them the most, they may not be ready for it. ‘

Meanwhile, MTUC secretary-general J Solomon, in welcoming the new minimum wage rate said that it was, however, not the amount they had proposed.

“We will accept the effort of the government for now. In return we hope the government will appreciate the goodwill from us and will set a more acceptable minimum wage amount in the next review.”

He also voiced appreciation to the government for taking into account the needs of Malaysians in the B40 group.

He said the overall allocation for the B40 would assist this vulnerable group.

“The government has given consideration to the needs and the voices of the poor workers and we welcome it and it is now for the employers to meaningfully contribute their social obligations to the B40 and the M40 in addition to what the government has given.”

Meanwhile, PSM’s Michael Jeyakumar also praised the government’s effort to increase the minimum wage, adding that it would help the B40 groups especially.

“Although the hike is RM50, but it is better now that it is increasing.”