Associations unclear about wage subsidy

  • Metro News
  • Friday, 03 Apr 2020

PENANG’S tourism industry is seeing bleak times with smaller hotels facing the possibility of going under due to the Covid-19 movement control order (MCO).

Malaysian Association of Hotels (MAH) Penang chapter chairman Khoo Boo Lim said the hotels were not looking at cutting the salaries of workers or asking them to go on no-pay leave.

“However, some members who operate small hotels will have to take certain measures to keep them afloat including pay cut if necessary.

“While the federal government’s economic stimulus package gives a RM600 wage subsidy for three months for businesses which suffered a 50% reductions in earnings, it’s unclear how it’s going to be disbursed.Khoo says some owners of smaller hotels are already planning to sell their hotels.Khoo says some owners of smaller hotels are already planning to sell their hotels.

“How will they claim the RM600, when will it be given, can the hotels sustain until the money comes or how do you prove that you had a 50% reduction in business.

“There are no specifics really, and while the bigger hotels may be able to hold until the MCO is over, it’s not the same for owners of smaller hotels.

“Some are already planning to sell their hotels, ” he added.

Deputy Chief Minister ll Dr P. Ramasamy, who is state human capital development committee chairman, said small businesses would be able to survive the first phase.

“However, it’s still a question mark on the second phase as a stricter MCO could create upheavals in the industry where drastic actions would be needed to sustain.

“I am not saying that hotels should continue paying the salaries of their staff even if they are facing the possibility of going under as we are not facing normal times.

“What could be done is a gradual reduction such as overtime claims or allowances rather than a salary cut, which would be less drastic.”

The RM250bil economic stimulus package announced payouts for groups of people, a RM600 wage subsidy for three months for those employed in the private sector and a RM50bil loan guarantee scheme for big corporations.

Associations have voiced out that not enough was done for small businesses and small and medium scale enterprises (SME).

SME Association president Datuk Michael Kang said the government’s proposal to provide loans was not good enough as there was no reason for small businesses to take up more borrowings to sustain businesses when there was uncertainty as to when incomes would pick up.

FMM president Tan Sri Soh Thian Lai said that the prolonged MCO had grounded many businesses while employers were burdened to meet wage bills on top of other expenses.

He proposed that the RM600 per month wage subsidy for three months should be extended to all employees regardless of wage levels and it be an automatic subsidy without the need for companies to prove reduction in earnings by 50%.

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