Progressive wage policy needs details ironed out, says MEF

Housekeeping matters need to be sorted out before the progressive wage policy is implemented across Malaysia, said the Malaysia Employers Federation.
By: | January 15, 2024

Employers are prepared to implement the progressive wage policy with a pilot project ready to be rolled out in June this year but they should also tighten any loose ends before implementing the policy, said the Malaysia Employers Federation (MEF).

According to Datuk Dr Syed Hussain Syed Husman, President of MEF,  higher wages based on the increase of productivity among employers will lure more investors to the country. However, the rate of productivity growth must be increased first with the cost to be borne by the employers. Thus, to offset the extra burden, the Malaysian government should cover the cost for upskilling and reskilling before employees can be paid higher wages.

“The (progressive wage) policy is not only about adjusting wages that will be commensurate with work performance, productivity, skills and experience but will also ensure employers improve productivity and profits while consumers get better products and services at affordable prices.

“Under progressive wage models, as employees acquire certified skills, gain more experience and show improved job performance and productivity they will be eligible for higher wages.”

Meanwhile, Jason Loh Seong Wei, EMIR Research Head of Social, Law and Human Rights elaborated that the policy was fair and balanced as it does not impose directly on the employers with the government providing cash incentives to supplement the implementation of the salary increment.

READ MORE: Progressive wage policy in Malaysia will be applied with care

“This will not only raise productivity in terms of output but also training and development (T&D) such as upskilling and reskilling,” he said.

In November, the Ministry of Economy stated that about 80% of selected employers are willing to participate in the Progressive Wage Policy if it is voluntary and allows them to first examine the organisation’s financial capabilities and performance before participating.