Consistency in defining wages called for in Malaysia 

The Malaysian Employers Federation is calling for a clear definition of wages, as its current ambiguity is causing mismatched salaries for employees.
By: | June 27, 2023
Topics: Compensation and Benefits | Employment Law | Malaysia

To eliminate a mismatch of salaries for employees, Malaysia needs a clearer and more consistent definition of the term “wages” across different government agencies, said the Malaysian Employers Federation (MEF).

The union’s Executive Director Shamsuddin Bardan, said, “The term ‘wages’ has different definitions under the Employment Act, the Minimum Wages Order 2022, the Human Resources Development Fund and the Employees Insurance Scheme.  We aren’t even able to streamline the definition.”

The lack of a proper and uniform definition, he elaborated, is causing inconsistencies when it comes to salaries. For example, the Employment Act defined “wages” as basic wages with service charges, but the Minimum Wages Order 2022 does not include the service charges, reported Free Malaysia Today.

“That is why it’s important for us to have a common definition. Even EPF (Employees Provident Fund) says service charges are not wages, so that leads to lower contributions,” he said.

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Shamsuddin also called for for employees’ skills certification to be funded by the government to the tune of RM3 billion (US$641 million). “Once we’re able to do that, then we can tell the whole world that Malaysia has skilled and certified talent,” he added.