Employers in Malaysia seek guidelines for wage policy implementation 

More transparency is needed to ensure proposed cash incentives are not abused and are properly utilised, employers argue.
By: | September 29, 2023
Topics: Compensation and Benefits | Compliance | Malaysia | News

Employers in Malaysia have called on the government to provide clear guidelines and enforcement to prevent abuse of a new initiative introduced to support the nation’s Progressive Wage Policy.

Economy Minister Rafizi Ramli had announced earlier this week that employers would be eligible to receive cash incentives after fulfilling the requirements of the Progressive Wage Policy.

Koong Lin Loong, SMEs Committee Chairman, Associated Chinese Chambers of Commerce and Industry of Malaysia’s (ACCCIM), said, “The incentive requirements should be based on the increased productivity and output of businesses that are proven to be due to any increment in wages. This ensures that money only goes to those who have proven themselves, effectively funding industrial growth and innovation.”

A transparent rollout of cash incentives would be the best solution to encourage more local businesses to adopt a progressive wage policy, said Datuk Dr Syed Hussain Syed Husman, President of the Malaysian Employers Federation (MEF).

“All the relevant terms and conditions need to be defined clearly so that employers will be able to understand and decide for themselves if they can financially afford to implement the progressive wage policy,” he explained. Eligible employees, he added, should be pushed to undergo mandatory upskilling and reskilling to improve productivity and ensure the cash incentive is full leveraged to overcome the skilled worker shortage in Malaysia.

READ MORE: Malaysia encourages wage policy compliance with cash incentives

To set an example, said Datuk Ameer Ali Mydinm, President of the Bumiputra Retailers Organisation (BRO), the Malaysian government should push to get bigger industry organisations on board to adopt the progressive wage policies so that smaller organisations would follow suit.

“With big industry players as the first adopters, smaller industry players will feel more assured and motivated to adopt a progressive wage policy, especially if it becomes an industry standard,” he said, reported The Star.