PETALING JAYA: The Labour Department must be strict in ensuring full employer compliance with the newly implemented RM1,700 minimum wage that takes effect today, say stakeholders.
Malaysian Trades Union Congress president Mohd Effendy Abdul Ghani warned that without stringent enforcement, many workers might not receive the new wage, thereby undermining the policy’s objectives.
“Laws without enforcement are documents without value, allowing irresponsible employers to continue exploiting workers by paying below the minimum wage,” he said in a statement yesterday.
The department, he said, must take firm action against employers who fail to comply, as no worker should be deprived of their rightful wages.
Mohd Effendy added that the minimum wage is a safety net for those without formal education or special skills.
He said the government and employers should recognise educational and skill levels by implementing a structured, fair wage scale.
Mohd Effendy stressed that categorising skilled and educated workers under the minimum wage bracket would devalue education and demotivate the younger workforce from upgrading their skills.
To address this, he urged the government to introduce a “dignified wage policy” that acknowledges education and skill levels in salary structures.
“The government must implement policies that reflect the true value of workers’ education and experience, while employers should establish wage structures that attract and retain talent,” he added.
Under the Human Resources Ministry’s Minimum Wage Order 2024, which takes effect today, companies with five or more workers must pay a minimum monthly wage of RM1,700.
This is expected to benefit 4.37 million workers in Malaysia.
For employers with fewer than five workers, the new minimum wage will take effect from Aug 1.
The Union Network International-Malaysia Labour Centre urged the government to standardise the new minimum wage across Peninsular Malaysia, Sabah and Sarawak to ensure fair treatment for all workers.
Its president Datuk Mohamed Shafie BP Mammal said the new minimum wage would help workers plan their finances.
“With the enforcement of this new minimum wage, at the very least workers will be able to plan their lives and family finances.”
He urged authorities to ensure the effective and smooth enforcement of the new wage policy, particularly for workers currently earning below RM1,700.
Mohamed Shafie also echoed the ministry’s stance that the minimum wage should not be used as a benchmark for the starting pay of all workers, particularly graduates.
Labour Law Reform Coalition co-chairman N. Gopal Kishnam said the RM1,700 minimum wage should be extended to all workers from the B40 group rather than only those currently earning below that threshold.
He argued that such an approach would ensure wage parity within the group.
“That makes more sense because everyone in that group will then get the same amount as they all need it,” Gopal Kishnam said when contacted.
Citing a study by Khazanah Research Institute (KRI), he said that RM1,700 is insufficient for low-income households to meet their basic needs.
In a 2016 study, KRI found that households earning less than RM2,000 per month, categorised under the B40 group, spent more than 96% of their income on household expenses.
“So, what is left for that family to depend on? Even at that time (in 2016), it was not enough.”
Federation of Malaysian Manufacturers president Soh Thian Lai said future adjustments to the minimum wage should adopt a state-based or regional approach to better reflect local economic conditions.
