Malaysia defers minimum wage order for small businesses

Malaysia has announced that the implementation of the RM1,500 (US$339) Minimum Wage Order (MWO) for employers with fewer than five employees will be postponed from 1 January 2023 to 1 July 2023. The decision was reached after considering the views of various stakeholders who are likely to face economic and financial challenges in 2023.

Previously, the MWO 2022 came into effect on 1 May 2022, with a monthly minimum wage of RM1,500 for all sectors, regardless of region, for employers with five or more employees. On the other hand, employers with fewer than five employees were granted an exemption and the implementation of MWO 2022 amounting to RM1,500 per month would begin on 1 January 2023.

READ: Malaysian union urges enactment of revised Employment Act

V Sivakumar, Malaysia’s Human Resources Minister, said the six-month delay is expected to provide an opportunity to coordinate and balance financial needs, which will help restore the economic position of organisations with fewer than five employees.

“Employers with five or more employees who carry out professional activities classified under the Malaysian Standard Classification of Occupation must continue to pay the RM1,500 minimum wage beginning 1 May 2022. Employers who are not involved in this delay must continue to comply with MWO implementation by paying employees a minimum monthly salary of RM1,500,” he said, reported The Malaysian Reserve.