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RM800 TO RM900: Ruling to be implemented in six to 12 months
PUTRAJAYA: THE minimum wage for the private sector has been set at RM900, or RM4.33 an hour, for the peninsula and RM800, or RM3.85 an hour, for Sabah, Labuan and Sarawak.
In announcing this last night, Prime Minister Datuk Seri Najib Razak said this was in preparation for Malaysia morphing into a high-income nation.
He said the new minimum wage scale would cover all economic sectors, except for domestic services, involving maids and gardeners.
“Once the Minimum Wage Order is gazetted, employers will be given six months to implement it.
“However, employers of micro enterprises will be given 12 months to do so as we understand they will need more time to make the necessary adjustments and ensure their businesses are not affected,” he said ahead of Workers Day.
The 12-month extension, however, will not apply to professional firms, such as medical and dental clinics, law, architectural and consultation firms, even if they have fewer than five employees.
Najib believed the time given to make the transition would be sufficient for employers to restructure their workers’ salaries.
“We are also preparing a flexible mechanism to allow employers who really cannot implement the minimum wage policy (within the given time) to apply for an extension.”
The policy will benefit some 3.2 million workers in the small- and medium-enterprise sector who earn an average of less than RM700 a month. They represent 33 per cent of the workforce who live below the poverty line of RM763.
It is learnt that the minimum wage is also to encourage locals to take up jobs and reduce the dependency on foreign workers.
“The introduction of the minimum wage is a historic moment for Malaysia. The lowest paid will now be guaranteed an income that lifts them out of poverty and helps ensure that they can meet the rising cost of living.
“In making their recommendations, the National Wage Consultation Council carefully assessed the economic conditions.
The proposed rates take into account the needs of businesses, while ensuring that no Malaysian is left behind in the country’s economic progress.”
The government is putting together another mechanism by allowing employers to take into account the allowances or fixed cash payment in the calculation of the minimum wage.
Najib said the government was aware of employees’ demands to set the minimum wage higher at between RM1,200 and RM1,500.
“But for a start, and as what was proposed by the National Wages Consultative Council and based on the World Bank’s study, the minimum wage cannot be set too high.
“If it is set above RM900 (basic salary), the impact can be detrimental to the nation’s economy, labour market and foreign investment in Malaysia.”
Should this happen, Najib feared the industry would be unable to operate effectively and spark concerns among workers that they may lose their jobs.
“Workers’ welfare and national interests will be affected.”
Najib said the government also realised its decision to have a different minimum wage scale for the peninsula and the rest of the country would expose itself to criticisms of being unfair.
“The varying minimum wage scale is because of the differences in salaries and cost of living.”
Nonetheless, Najib assured that the minimum wage scale would be reviewed from time to time so that a single minimum wage scale could be introduced for all.
In Sabah, Labuan and Sarawak, employers are able to pay an average of RM577. For the peninsula, this is RM1,131. If a single minimum wage is set, it can lead to destabilisation of the economy, especially in Sabah and Sarawak, as employers would not be able to pay the salaries.
The Human Resources Ministry is working on a plan to have a single minimum wage scale. It hopes to do this during its reviews to be conducted every two years.
It is expected that more Sabah and Sarawak workers may return to their hometowns after the announcement as they will be able to get better pay.
There is also no discrimination between local and foreign workers as the minimum wage is applicable to all, in accordance with international labour standards.
Errant employers can be fined RM10,000 per employee. For a continuous offence, they can be fined RM1,000 per day. Repeat offenders face a RM20,000 fine or five years’ jail, or both.
Najib yesterday wished Malaysians a Happy Workers Day 2012. In a posting at his 1Malaysia blog, he said the success achieved and enjoyed by the country in the past, present and future would not be possible without the contributions and sacrifices made by Malaysian workers.