Progressive wage policy to undergo dry-run from June next year, says Rafizi

KUALA LUMPUR: The government is preparing for the possibility of oversubscription into its progressive wage policy voluntary pilot programme, which is scheduled to start next year, says Rafizi Ramli.

The Economy Minister said the ministry would undergo a dry-run with the first 1,000 companies from June to September 2024 to sort out any teething or operational issues.

“We will open registrations in April and have spoken to the Malaysian Employers Federation, industry players and others.

“I am confident that employers will participate. The issue now is employers finding talents to match their needs,” he said in a press conference at the Parliament media room on Thursday (Nov 30).

Rafizi said his ministry allocated RM30mil for the programme, which would only be for entry-level graduates, semi-skilled Malaysians, and companies that were disadvantaged based on the current labour markets.

Rafizi added that the employers welcomed the voluntary aspect of the programme as they were worried about other mandatory policies being imposed, such as the minimum wage, as it would eventually take away the competitive salaries offered by the companies.

He also dismissed claims that the decision to adopt a voluntary option was made based on lobbying by certain groups.

“There were companies already grappling with the minimum wage, pushing up their operating costs.

“By removing the mandatory part, it was a strategic decision based on the fact that 97% of businesses in Malaysia are micro, small, and medium-sized enterprises or SMEs,” he said.

Rafizi revealed that the burden is on the government and that the pilot project, when implemented, will make an impact.

“(We must) make sure every ringgit the government allocates really improves our labour market, the pay structure and the most important one, the skilled talent in the economy,” he said.

When tabling the White Paper on the progressive wage policy at the Dewan Rakyat, Rafizi proposed that employers who took part in the voluntary programme would get a fixed incentive of up to RM200 per month for entry-level workers and up to RM300 per month for workers for 12 months from the government.

He said the increments for the employees would depend on the productivity and skills of the staff.