Minimum wage plan delayed for companies with fewer than five workers

PETALING JAYA: There is some breathing space given to companies with fewer than five workers as the implementation of the RM1,500 minimum wage has been deferred to July 2023.

It was supposed to come into effect on Jan 1, 2023.

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The decision was made after taking into account the readiness of such companies, said Human Resources Minister V. Sivakumar.

He said the government also considered the views of stakeholders, as well as expected economic and financial challenges for the coming year, into consideration.

“It is hoped that the postponement will give the companies a chance to coordinate and balance their financial needs and help (strengthen their) economic footing,” he said in a statement yesterday.

The announcement received vastly different responses from employers and employee groups.

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However, companies with five or more employees and whose professional activity falls under the Malaysia Standard Classification of Occupation will have to continue paying the minimum wage of RM1,500.

The new minimum wage rate was gazetted in April and came into effect in May. Prior to that, the country’s minimum wage was RM1,200.

However, employers with fewer than five employees were given an extension until Jan 1, 2023.

Under Paragraph 4 (1) of the gazette, an employee who is not paid basic wages but is paid based on piece rate, tonnage, task, trip or commission, the monthly wage rate payable to the employee with effect from May 1, 2022, shall not be less than RM1,500.

“For six working days, the employee should be paid RM57.69 a day, RM69.23 a day for five working days and RM86.54 a day for working four days equivalent to an hourly rate of RM7.21.”