Biz groups: Now not the right time, do it in phases

Concerned: (From left) Soh, Jawahar and Low have expressed a range of views that encompass the timing of the implementation to the implications for businesses still in recovery.

PETALING JAYA: The minimum wage should be adjusted progressively to give businesses time to adapt, says Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai.

“Based on the findings of a survey conducted from Jan 5 until Feb 10, the majority of survey respondents said a RM100 increase in the minimum wage is an acceptable rate, given current economic conditions. FMM had proposed to the government for the adjustment of the minimum wage to be implemented gradually with a RM100 increase in the third quarter of 2022 and a subsequent adjustment in 2023/2024 to reach RM1,500,” he added.

He was referring to FMM-MIER Business Conditions Survey 2H2021. MIER is the Malaysian Institute of Economic Research.

Soh said a progressive increase would work best instead of introducing exemptions as it will help to address the increase in the cost of living while allowing businesses to survive.

“It also allows employers to continue to plan for salary increments in 2022 that would further address cost of living pressures,” he added.

Malaysian Indian Muslim Restaurant Owners Association president Datuk Jawahar Ali Taib Khan said the implementation is too soon for industry players who are still trying to recover from the pandemic.

“For us, we are just beginning to breathe after the pandemic and the flood disaster (last December), resuming our business with hopes of recovering from our losses.

“This announcement came as a shock to many.

“We are not opposing the increase, but it should be gradual like RM100 first and next year another RM100 so that we don’t feel the pinch and be burdened,” he said when contacted.

Describing the May 1 implementation as a “big disappointment”, National Chamber of Commerce and Industry Malaysia (NCCIM) president Datuk Low Kian Chuan said most small and medium enterprises (SMEs) would be badly affected.

Unlike past practices, he said the implementation was announced without any prior engagement with business groups despite the government’s repeated promises to keep them in the loop.

“Most businesses are not financially stable enough to implement the proposed minimum wage as their cashflow and revenue are still on the mend and have not been fully restored to pre-pandemic levels.

“We concur with the minister that the minimum wage needs to be reviewed every two years but we cannot agree to the steep hike,” he added.

Low, who is also president of the Associated Chinese Chambers of Commerce and Industry of Malaysia, said the exemption for certain sectors would only worsen their problems in getting workers, as the large wage difference will disincentivise workers in those sectors.

SME Association of Malaysia president Ding Hong Sing agreed, saying that more will leave for higher pay at the bigger companies, causing production problems and a worker shortage for smaller or exempted businesses.

“We are facing so many challenges globally, this is not the time to revise our minimum wage. Otherwise, when will our SMEs ever recover?” he said.

He suggested a higher hostel deduction from workers’ salaries, from the current RM50 to RM300 a month, and the levy be paid by workers, to lessen employers’ burden.

Association of Malaysian Hauliers president Soo Chee Yeong also called on the government to rethink its decision, saying that the 25% increase in basic pay will have a spiral effect on the increase of operational costs as wages represent the bulk of their costs.

“As the dominant portion of the wages consists of our driver’s salaries and commissions per trip, the motivation for them to consistently work without disruption will decrease immediately,” he argued.

In JOHOR BARU, Iskandar Malaysia Johor Chamber of Commerce and Industry adviser Md Salikon Sarpin said Putrajaya should focus on making Malaysia a high-income nation first before implementing a minimum wage increase.

Johor South SME Association adviser Teh Kee Sin said the timing is impractical with many SMEs still recovering.