MEF urges government to re-look minimum wage increment

The Malaysian Employers Federation (MEF) hopes the government would re-look the decision to increase minimum wages on July 1, 2016, to help local companies survive challenging economic conditions.

Executive Director Datuk Shamsuddin Bardan said this was not an opportune time to implement the policy.

"With the current economic condition, it is not appropriate for us to further burden employers, therefore, we call on the government to review the implementation date.

"With falling oil prices and weakening ringgit, it is vital to give local employers some room to breathe," Shamsuddin told reporters at a half-day seminar organised by the Inland Revenue Board and Malaysian Employers Federation.

Earlier in his speech, he said up to Sept 2015, many big corporations had reported a reduction in profits of between 35 and 40 per cent in their financial reports.

"Many companies are streamlining their workforce and total retrenchment in 2015 amounted to about 26,000.

"From the employers' perspective, these factors have had serious detrimental impact on the cost of doing business, investments and job creations," he said.

Prime Minister Datuk Seri Najib Tun Razak announced in the recalibrated 2016 Budget that minimum wages would increase to RM1,000 per month for Peninsular Malaysia and RM920 per month for Sabah and Sarawak.

Shamsuddin said the minimum wages, when implemented, would benefit foreign workers here and allow more remittances by them.

"It is expected that the remittances would add about RM5 billion per year to the existing official remittances of about RM30 billion.

"Considering the health of the ringgit, I don't think Malaysia can afford any more capital outflow," he said, adding that 80 per cent of the beneficiaries of the minimum wages would be foreign workers.

He said currently the number of legal Bangladeshi workers stood at 300,000while the illegals as reported to the Bangladesh government, stood at 400,000.

With the impending arrival of 1.5 million Bangladeshi workers, that would sum up the total Bangladeshi workforce in Malaysia to 2.2 million.

"The number of foreign workers that is desired under the 11th Malaysia Plan, is only 15 per cent of the labour force which is about 2.1 million, therefore 2.2 million far exceeds the ideal plan.

"MEF is not against higher wages but what we desire is for local companies to reduce their reliability on manpower requirement and go for automation, in line with the government's aspiration to become a high-developed nation," he said.