Minimum wage can be reviewed more than once in two years, says HR Ministry

Slowing exports and tepid inflation have raised expectations that policy makers will need to consider adding to May

KUALA LUMPUR: Reviews on the minimum wage can be done more than once in two years if the situation calls for it, says the Human Resources Ministry.

Its Deputy Minister Datuk Mahfuz Omar said at present, the National Wage Consultative Council Act 2011 (Act 732) stipulates that a review must be done every two years.

"The review must be done at least once in every two years but we can consider if there is a condition that forces or demands us to relook into it (minimum wage) more than once in the stipulated period.

"If there is a need for it then the government is prepared to do so," he said in a reply to a supplementary question by Cha Kee Chin (PH-Rasah) who wanted to know if the government would have an annual review for the betterment of all parties.

Mahfuz said if the situation becomes better, such as the strengthening of small and medium enterprises (SMEs) or if the economy improves, then the government would be willing to conduct a review of more than once every two years.

He added that all parties should look from a bigger perspective on the government's move to standardise minimum wage in the peninsula, Sabah, Sarawak and Labuan to RM1,050.

Mahfuz said the move would discourage employers from hiring foreign workers as the rates are the same.

Employers would hire foreigners as they were able to pay them cheaper wages as the current minimum wage for Malaysians is RM1,000 in Peninsular Malaysia and RM920 in Sabah and Sarawak.

Mahfuz said that various factors were taken into account before deciding on the RM50 hike introduced by the Pakatan Harapan government.

One of the reasons is to avoid a sudden spike in operational costs for employers, especially for SMEs as it would mean higher contributions in terms of Employers Provident Fund (EPF), Social Security Organisation (Socso) and overtime payment.

Other factors include not driving away foreign direct investors by implementing a minimum wage rate that is too high.

Mahfuz said that the RM50 hike, which will come into place in January next year, also does not burden about 90% of the SMEs in the country.

He said the RM1,050 served as a base, adding that employees in private sectors can discuss with their employers in terms of benefits.

"The RM1,050 means those in the private sector cannot be paid lesser than that.

"However, employers, employees as well as unions are free to negotiate on their basic pay as well as other benefits," he added.