Progressive wage model being studied to improve salary system

PUTRAJAYA: The progressive wage model will be tabled at the National Economic Action Council (MTEN) with the aim to analyse the suitability of its implementation, says V. Sivakumar.

In a statement, the Human Resources Minister said it was also to decide whether to study the salary model or seek other alternatives to improve the existing salary system in this country.

"The government has yet to finalise whether to use the (progressive) wage model," he said, adding that it was aware that the proposed progressive wage model has constraints in terms of its implementation.

Last Wednesday, Economy Minister Rafizi Ramli said the policy paper developed by the Economy Ministry and the Human Resources Ministry on the Progressive Wage Policy will be presented to MTEN in August.

Rafizi said the policy is aimed at ensuring a more inclusive and equitable growth of the people’s wages, as well as driving towards a better income.

Sivakumar said the progressive wage model, among other things, would be able to help find solutions to benefit both parties in addition to the productivity linked-wage system promoted by the Malaysian Industrial Relations Department since 2005.

He added that Singapore has implemented a progressive wage model after conducting a study for five years and the wage model is only implemented in three sub-sectors.

In the meantime, Sivakumar said the minimum wage set by the government will be reviewed at least once every two years.

The government's intention in fixing the wages is for employees to get a salary that will commensurate with their work productivity, skills and experience while ensuring the employer gets improved productivity and profits, he said.

However, he said the government would also look at the suitability of other salary models to benefit both employees and employers.

Salary is an individual's income for work completed over a period of time while the minimum wage according to Section 2 of the National Wage Consultative Council Act 2011 (Act 732) is the basic income that does not include any allowances or other payments. - Bernama