Minimum wage in Malaysia does not include overtime pay and allowances

The SME Association of Malaysia has cautioned that businesses may shutter or cut manpower if the costs of basic wages are too high to shoulder.
By: | May 9, 2022
Topics: Compensation and Benefits | Health and Wellness | Malaysia | News

Malaysia’s minimum wage of RM1,500 (US$343) a month only applies to basic wages and does not include overtime wages and allowances, said Human Resources Minister Datuk Seri M. Saravanan in response to The Star.

SME Association of Malaysia president Ding Hong Sing has said that more than 90% of Malaysians employed by small and medium enterprises were already receiving RM1,500 or more monthly, if other allowances and payments are taken into account.

Given that the basic wages have increased, bosses might now resort to cutting their workers’ allowances, he noted. 

He also highlighted that employers who could not afford to pay their workers the basic wage of RM1,500 might resort to downsizing their manpower or, in worst-case scenarios, shut down their business. 

READ: Malaysia disburses RM151 million in wage subsidies

“Foreign workers are getting RM1,200 because we have to provide them with accommodation, pay the levy and Foreign Workers’ Medical Examination Screening System medical check-ups. When you include all that, it is more than RM1,500,” added Ding.