Minimum wage: Let’s have more engagement, business groups urge govt


Syed Hussain: ‘At this tough time, we need full employment to grow the businesses and the national economy.’

PETALING JAYA: While it is good for small companies to have the implementation of the minimum wage delayed to July, business groups want the government to do more by engaging with them.

They said the new team at the Human Resources Ministry should ditch the old ways and avoid working in silos in policymaking.

Federation of Malaysian Business Associations (FMBA) deputy secretary-general Dr Sri Ganesh Michiel said the new government should altogether postpone the implementation of the amendments to the Employment Act and conduct fresh engagement with all stakeholders.

“The delay in implementing the RM1,500 minimum wage for small employers is good, and no doubt gives a breather to businesses struggling to recover, but this is not enough.

“The new government needs to do more, and they should start by engaging with all stakeholders before making any policy that will affect us.

ALSO READ: Dashed hopes by days as minimum wage deferred again

“Since it is a new minister in the new government, the amendments of the Employment Act should be put off first. Then please engage with all the stakeholders and us and hear our concerns,” he said here yesterday.

Sri Ganesh, who is also Malaysia Budget and Business Hotel Association president, said any change to the workers’ law would affect businesses directly, especially in their business costs, and the government must not work in silos.

Sri Ganesh: ‘They (the govt) should start by engaging with all stakeholders before making any policy that will affect us.’Sri Ganesh: ‘They (the govt) should start by engaging with all stakeholders before making any policy that will affect us.’

“The government should facilitate businesses and not irritate them.

“They should listen and assist us because most businesses are not in an easy situation while struggling to recover,” he said, adding that such a change in law should only be implemented when businesses have recovered.

SME Association of Malaysia president Ding Hong Sing also agreed that the government needs more engagement with various business groups and players.

“They should not repeat the old way, which led to bad policies. The minister should at least have a discussion or meeting with the stakeholders.

“They should get down to the ground more to see for themselves what’s the reality,” he said, adding that frequent engagement can save the government from backtracking or making a U-turn in policymaking.

Ding said some of the amendments in the Act should be relooked because the timing of their implementation is not right.

“It is a big burden to employers while businesses have only begun to do better,” he said, adding that the cost for employers to follow the new provisions hampered a quicker recovery.

ALSO READ: Minimum wage plan delayed for companies with fewer than five workers

Small and Medium Enterprises Association of Malaysia (Samenta) chairman Datuk William Ng said the extension, which is primarily for micro businesses, will support their recovery following the pandemic.

“We have always called for wages to be determined by the market so as to minimise the distortion to labour productivity.

“Ideally, wages should be tied to productivity and output which would allow employees who are most productive to receive far more.

“This concept is already practised in the gig economy, for example, the p-hailing industry, so there is really no reason to continue the post-Merdeka era practice of setting a national minimum wage,” he said.

Ng: ‘We have always called for wages to be determined by the market so as to minimise the distortion to labour productivity.’Ng: ‘We have always called for wages to be determined by the market so as to minimise the distortion to labour productivity.’

Ng said it is a continued misconception that most are SMEs underpaying employees.

He said in fact, some of Samenta’s members are paying above market rate yet are unable to attract talents.

“The issues we should be focused on is to stem the talent migration, narrow the skills mismatch and raise the productivity of employers and employees,” he said.

Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said businesses are expected to face a challenging time in 2023, especially micro enterprises which typically employ fewer than five people.

“The number of such enterprises is estimated to be about 560,000. The deferment of the RM1,500 minimum wage to July will allow them (some time) to focus on building their business and cash flow,” he said in a statement yesterday.

Syed Hussain said MEF is optimistic that once businesses are on a stable footing, the employers concerned will honour the minimum wage requirement.

“Employers value their employees, who are their assets. This is an issue of sustainability and keeping their businesses alive while retaining staff and building their financial position,” he said.

Syed Hussain added that no employer wants to lose experienced workers.

“(A lot of) time and investment have been put into growing skills and knowledge. Having more businesses alive will create more employment.

“At this tough time, we need full employment to grow the businesses and the national economy,” he said, adding that employers, employees and the government should work together to build the nation.

On Dec 21, Human Resources Minister V. Sivakumar announced that the implementation of the amended Act will proceed on Jan 1, saying that it has been made in accordance with the standards of the International Labour Organisation (ILO).

Besides the implementation of a minimum wage, the amendments outline flexible working arrangements; an increase in overtime payments for employees with wages up to RM4,000 per month; a reduction of working hours from 48 hours to 45; 60 days of hospitalisation leave per year in addition to non-hospitalisation sick leave; increase in maternity leave from 60 days to 98, and paternity leave of seven continuous days per birth.

Then yesterday, Sivakumar announced that the implementation of the RM1,500 minimum wage rule for companies employing fewer than five employees has been postponed from Jan 1 to July.

He said the decision was made after taking into account the readiness of such companies.

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