New Minimum Wage Implemented On July 1

Despite the complaints from employers, the Minimum Wages Order 2016 (MWO 2016) was implemented last Friday.

In the Prime Minister Datuk Seri Najib Tun Razak’s announcement of the new minimum wage rates in the 2016 Budget, employers were given eight months to prepare for the implementation on July 1, 2016, said Human Resources Minister Datuk Seri Richard Riot.

“Claims that they are not prepared because the economy is not good is also unfounded,” he said in a report on The Star Online.

Labour productivity indicator showed an upward trend last year at RM75,538 against RM73,091 in 2014, while foreign direct investment amounted to RM43.4billion in 2015, added Riot.

“Employers must honour the new rates for minimum wage without any delay,” he said after the Malaysian Employers Federation said that many employers were ill-prepared to implement it due to the currently flat economy, which was not conducive for most businesses.

The minimum wages of RM1,000 per month or RM4.81 per hour for Peninsular Malaysia, and RM920 per month or RM4.42 per hour for Sabah, Sarawak and Labuan, are set according to the region.

For those who are paid on a piecework, tonnage, trip or commission basis, their monthly salary shall not be less than RM1,000 in Peninsular Malaysia, and RM920 in Sabah, Sarawak and Labuan.

“Hopefully, the increase in income will benefit the workers with a more equitable salary structure besides encouraging higher productivity and more skilled employment,” Datuk Seri Najib said in a Facebook entry.

The MWO 2016 must be implemented by all employers in the private sector, regardless of the number of employees they have, except domestic helpers.

The new rates were set by the Government after studying all views and recommendations submitted by the National Wages Consultative Council. The rates were set after the interests of both employers and employees were taken into consideration, Riot said.

For employers who failed to heed the order and those who flouted it would be liable to a find and even a jail term.

[Source]