PETALING JAYA: The implementation of the Progressive Wage Policy (DGP) acts as a new measure to reform the labour market, aiming to raise wages in line with productivity and experience, says Steven Sim.
“Various upskilling training programmes for workers will be actively carried out by the ministry to ensure wage rates increase in accordance with workers' skills and performance,” the Human Resources Minister said.
Sim also said that for the first time, the ministry will also publish starting salary guidelines for all employment sectors based on the Malaysia Standard Classification of Occupations (MASCO).
These guidelines, he added, will serve as a reference for both workers and employers in determining appropriate starting salary rates for specific jobs.
Separately on the minimum wage increase from RM1,500 to RM1,700, he said it will increase the previous household income of the people by 13.3% .
But he cautioned that the minimum wage should not be considered a starting salary, particularly for graduates and skilled workers.
During the Budget 2025 announcement, Prime Minister Datuk Seri Anwar Ibrahim said that following the pilot programme for the Progressive Wage Policy in June, it will be fully implemented next year, with a budget of RM200mil benefiting 50,000 workers.
Anwar, who is also Finance Minister, said that the Human Resources Ministry will also publish a set of guidelines for the starting salaries of industrial and production technicians (RM2,290), mechanical engineers (RM3,380) and professional creative content designers (RM2,985).
More details should be provided on the implementation of the Progressive Wage Policy (DGP) for each sector as the RM200mil budget to support it was not a big amount, said Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai.
“As such, we need to have a meaningful and successful DGP so that the companies who exercise it can continue for long-term and at the same time can have a high productivity culture,” he said.
Prof Dr Balakrishnan Parasuraman from Universiti Malaysia Kelantan's (UMK) Entrepreneurship and Business Faculty said the DGP presents a total approach for employees who do not fit into a particular group such as minimum wage or collective agreement.
“We will still have to see the findings from the pilot study of the policy. But the DGP is not only a guideline but it is also complementary to the minimum wage.
“However, the objective of the government here is clear, which is to help employees especially those who are left out of the equation who do not see any increment periodically,” he said.
SME Association of Malaysia president Chin Chee Seong said the objective of the DGP was favourable by increasing the basic income of most people as we gear towards a high income nation.
“It is a first step and the government is providing some incentive for companies in this manner. I can see the government has a good plan but this will only be taken up by SMEs and large companies.
“This will indirectly increase the cost of operations especially for SMEs, so they will have to be ready but I don’t foresee problems in the long term,” he said.
