Minimum Wage Policy in Malaysia

Malaysian Government had implement minimum wages order of RM1100. This salary adjustment for both Peninsular Malaysia and Sabah & Sarawak. The main objective behind this policy proposed by Bank Negara Malaysia is to reduce unbalanced income among the people. Employees from lower income group mostly get benefit from this implement. The main reason introducing minimum wage laws is to stop employers from exploiting desperate workers. The minimum wage should provide enough income to afford today living wage.

There are lot of impact from implementation of minimum wage. This implementation also would help to reduce race and gender inequality. With this implementation every group received equitable in distribution income respectively. There are lot of benefit to enjoy by middle class household when their income got adjusted. The main impact can see from EPF contribution from both employee and employer, buying power of consumer, training for worker to become skills worker to increase productivity and minimize foreign worker in industrial.

EPf Contribution - Increase in salary means increase in EPF contribution. The contribution not only from employees income buy also from employer. At retirement age, employees have sufficient saving funds in EPF. This will help employees to plan their future after retirement.

Buying power – Most of lower income group are working to support their personnel needs, and take care of families. Increase in household income can increase purchase some basic necessities for their families, parent and for themself too. Children will grow up with enough income, good health, good education and saving for their future. An increase in income means decreased stress level in children, good relationship in family and stronger chances of upward mobility. Raising the minimum wage increase the buying power of people an enable worker to have a basic standard of living.

Skill worker - Employees who are working with low income are those who do not have any skill to develop. Most of them don't have an opportunity to develop their skills to get better job. They don't have any choice and work with low salary. Changes in wages income, encourage employer provide training or send their workers for skill training to improve company management system to enable workers to enhance their productivity. This not only benefit for employees but advantage to company having skills worker in future.

Increase productivity – Employees feel very happy with implementation minimum wage. Increase in their income can motivate them to perform harder for the company. The efficiency can improve as it will help to increase productivity, loyalty as well as incentivize employees to do their best for the company. Company start to put more focus in increasing labour productivity because they know they pay costly for labour. This can increase efficiency of the economy.

Reduce foreign workers – Company train-up local workers to become skill workers. This can reduce depending on foreign staff in the organizations. Minimum wage implementation can encourage company employee to more focus on their works and control their absenteeism. Company push harder the local worker due to higher pay. This will improve their income when they apply for new job as skill worker. Most of company look for local skill worker rather than foreign worker. Foreign workers working in Malaysia are not skill worker category.

Minimum wage expected to be benefit all the workers. This will give positive impact not only or their needs, but also for their family. The most important workers can increase their productivity for their company and it’s good for country economy growth.