New minimum wage policy to take effect on July 1 - Riot

The Minimum Wages Order 2016, that is RM1,000 per month for Peninsular Malaysia, and RM920 for Sabah, Sarawak and Labuan, will take effect tomorrow (July 1) without any delay, said Human Resources Minister Datuk Seri Richard Riot Jaem.

He said claims that employers did not have sufficient time to start paying the new minimum wage from the date, were unfounded.

Riot said allegations that the country's current economic situation was not good, was also inaccurate, as various indicators such as the labour productivity growth for 2015 showed an increase to RM75,538, from RM73,091 in 2014.

Foreign Direct Investment (FDI) for 2015 also saw a positive increase to RM43,435 million, from RM35,600 million in 2014, he said.

"In setting the new minimum wage, the government had reviewed all the recommendations of the National Wages Consultative Council (NWCC) and adopted a 'balanced approach' to take into account the interests of both employers and workers, as well as the national economy," he said in a statement here, today.

The new minimum wage was announced by Prime Minister Datuk Seri Najib Razak when tabling Budget 2016 at the Dewan Rakyat on Oct 23, 2015.

Riot said the ministry had informed the public of the change through various channels, including via various engagement programmes held across the country throughout the month of June, to raise awareness among employers and trade unions about the matter.

He said the Labour Department would also ensure employers complied with the enforcement of the new minimum wage.

"Any party which fails to comply with the order, if convicted, can be fined up to RM10,000 for each offence and RM1,000 per day for a continuing offence under the National Wages Consultative Council Act 2011.

"Employers who are repeat offenders may face penalties of up to RM20,000 or five years' jail, or both," he said.

Riot said the implementation of the new minimum wage covered all employers including the hospitality sector, and their employers were required to pay a minimum base salary (without any element of service charge) of not less than RM1,000 a month in the Peninsular Malaysia and RM920 per month for Sabah,

Sarawak and Labuan.

He said employers in labor intensive industries were also encouraged to move towards mechanisation and automation of production processes to improve productivity and reduce dependence on unskilled foreign workers.

"The government is confident that this minimum wage policy would boost labour income and help improve the economy in achieving the high-income developed nation status, by 2020," he said.

More information on the implementation of the Minimum Wage Order 2016 can be obtained from the NWCC secretariat at 03-88865156, or via email at minimumwages@mohr.gov.my or by visiting any Labour Office nearby.