Progressive wage policy in Malaysia will be applied with care

The progressive wage policy will not be implemented in Malaysia arbitrarily, and will take note of the needs of the economy and people.
By: | January 11, 2024
Topics: Compensation and Benefits | Employment Law | Malaysia | News | Talent Management

The government will consider the ability of employees and the current state of Malaysia’s economy when it comes to the implementation of the progressive wage policy, said Rafizi Ramli, Economy Minister.

This was because the implementation of the policy was voluntary and involved incentives from the government, he said.

“We cannot impose arbitrarily, like a minimum wage order, because we also have to take into account the ability of companies, employers and the (national) economy. The largest employers in the country are actually micro, small and medium enterprises (PMKS) and 97% of business entities in our country is PMKS,” Rafizi explained.

 “If we make it mandatory, some (employers) will go out of business, some will lose their jobs so we have to balance it,” he explained, saying that there was need to account for the ability of employers and incentives in a voluntary motion.

Rafizi said this after officiating the Grant Presentation Ceremony under the People’s Income Initiative (IPR) programme and the Townhall Session with the Student Leadership of Universiti Teknologi Mara (UiTM) Selangor branch at UiTM Puncak Alam.

“The progressive wage policy has a different challenge, it’s not just a matter of money but it’s also how we (the government) want to convince employers to raise wages gradually.

Earlier, Rafizi through his ministry submitted a grant amounting to RM 6,961,500 (US $1,499,839.16) to the UiTM Student Affairs Division to carry out two projects namely the implementation of mapping and monitoring of the People’s Income Initiative (IPR) programmes well as the organisation of a financial literacy course for IPR participants conducted by UiTM Selangor Branch.

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The implementation of the mapping and monitoring of the IPR programme is a poverty census aimed at devising appropriate actions to increase the income of the participants to cross the poverty line involving nearly 1,400 heads of households in four states, reported the Malay Mail.