Concerns raised over minimum wage hike in Malaysia

The Federation of Malaysian Manufacturers (FMM) has raised concerns over Malaysia’s minimum wage hike to RM1,500 (US$344), citing that it may result in a steep increase in payroll costs and reverse business recovery for 2022.

The increase in workers’ wages will have a “tremendous knock-on effect” on the overall payroll cost and have a “spiralling impact on business cost that could potentially derail the economic recovery”, said President Tan Sri Soh Thian Lai.

“The industry has repeatedly affirmed that it is supportive of a review of the minimum wages but based on the current economic factors where the business environment continues to be fragile, a progressive adjustment with a RM150 increase in 2022 and a further increase of RM150 in 2023 to reach the RM1,500 minimum wage would be more manageable for the industry,” he noted in a statement. 

READ: Malaysia officially introduces minimum wage hike

“The small and medium enterprises, especially those in the suburban areas would be most impacted by this sharp rise in wage cost given that only the micro-enterprises will be exempted for a period of eight months until December 2022,” he added, reports Bernama.