MEF urges govt to be transparent on incentives for employers who meet progressive wage policy requirements

KUALA LUMPUR: The Malaysian Employers Federation (MEF) lauded the announcement of cash incentives for employers who fulfil the requirements of the progressive wage policy, but urged the government to be transparent in detailing the guidelines.

MEF president Datuk Dr Syed Hussain Syed Husman said it was crucial for the government to disclose the percentage of incentives that would be granted to eligible employers.

"It is important for the government to give cash incentives to encourage employers to voluntarily participate in the implementation of the progressive wage model (PWM).

"However, the government must transparently outline the model's terms and conditions, so that employers could gain a comprehensive understanding, and then assess their financial feasibility in voluntarily adopting PWM," he said.

Syed Hussain said the government has also yet to disclose details on the minimum wage raise limit on employees.

Citing Singapore as an example, he recommended the government to impelement the PWN in phases, initially focusing on the lowest-paid sector before gradually expanding to other chosen areas.

"PWM needs to be carefully planned and implemented in stages to ensure it meets the prime objective of raising wages through increases in productivity and performance," said Syed Hussain.

MEF is also demanding that the government subsidise a minimum of 75 per cent on the wage increase just like our neighbouring country, as many small and medium enterprises are still struggling to bring their businesses back to pre Covid-19 pandemic levels.

"Wages in formal private sector employment amount to about RM 30 billion per month. A 15 per cent increment is expected after the implementation of PWM. 

"It is desired that the government will subsidise a minimum of 75 per cent of the wage increase and this would cost about RM 3.38 billion per month. 

"Thus the minimum allocation for PWM in the 2024 budget should not be lower than RM 40.56 billion," said Syed Hussain.

Commenting further, Syed Hussain emphasised that PWM was not only about adjusting wages, but will also commensurate with work performance, productivity, skills and experience. 

"The percentage of certified skilled employees is expected to increase to the targeted level of 35 per cent by 2025. Currently, (our nation's standing) is only about 29 per cent," he added.

Syed Hussain believed under PWM, as employees acquire certified skills and show improved job performance and productivity, they would be eligible for higher wages.

"The discussion on how to map clear career pathways of employees, and for wages to be linked to upskilling, also improvement in productivity and standards are urgently needed," he said.

On another note, Syed Hussain said the government should explore methods to enhance productivity through PWM, as this would lead to a better economy for the nation as a whole.

"Linking increased wages to improved productivity will boost Malaysian employers' competitiveness and make Malaysia the darling of investors.

"The PWM will be supportive of the Madani Economy framework and elevate the dignity and status of the country through economic restructuring.

"I believe the implementation of PWM would lead to stronger economic growth, heighten our nation's GDP to the top 30 globally, and promote more equitable wealth distribution among Malaysians," said Syed Hussain.

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