Malaysia’s SME body calls for labour law reform and productivity

The Small and Medium Enterprises Association of Malaysia (Samenta) said this in response to HR minister M Saravanan’s announcement that the minimum wage would be raised to around RM1,500 (US$358) by the end of this year.

Samenta Central chairman Datuk William Ng said the group did not oppose raising the minimum wage, but called on the government to align this with the country’s economic output.

“The way forward for Malaysia and our workforce is to link income to productivity. The Productivity-Linked Wage System or PLWS, which counts the Ministry of Human Resources as among its champions, is seeing a lot of interests among businesses, including SMEs.”

“However, our labour laws, including the Employment Act 1955, are still time-based, meaning that any attempt at implementing PLWS would have to be on top of a time-based monthly salary, and not instead of it.”

“In more developed countries, such as Australia, it is common for employees to be paid based on output. Housekeepers in hotels, for example, are paid for rooms cleaned rather than hours worked,” Ng said.

READ: Malaysian worker unions push for minimum wage hike

“The interests of both businesses and working Malaysians are best served when incomes are tied to productivity, rather than a minimum wage premised upon workers working a fixed number of hours,” he added, according to Malay Mail.