PETALING JAYA: A proposed RM2,500 minimum wage could put pressure on small businesses, but it could also push employers to raise productivity, automate and adopt new technologies in their operations, say business groups.
Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said the higher wage ceiling would raise labour costs beyond the RM800 increase per employee, as statutory contributions and other employment-related costs would also rise.
He said the impact would be greater on micro, small and medium enterprises (MSMEs), particularly those operating on narrow margins.
“For a large, highly productive company, RM2,500 minimum wage may be manageable, but the situation is very different for MSMEs,” he said.
Syed Hussain said labour-intensive sectors would face the greatest pressure.
He added that some businesses could respond by reducing recruitment and working hours or raising prices while others could face closure.
“Minimum wage increases should be progressive, evidence-based and linked to productivity, economic conditions and the ability of different sectors and businesses to absorb the increase,” he said.
Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) SME committee chairman Datuk Koong Lin Loong said higher wages could also prompt businesses to improve productivity.
He said SMEs with larger workforces would need to adjust salaries across different levels to maintain appropriate wage gaps, further increasing overall labour costs.
However, he said the pressure could also encourage SMEs to automate and accelerate adoption of AI-enabled technologies.
“The middle ground is to increase this minimum wage in stages in order not to have a ‘hard landing’,” he said, recommending a phased increase alongside productivity-linked wages and sector-specific studies.
Earlier, the Melaka government said it was studying a proposal to recommend that the national minimum wage be raised from RM1,700 to RM2,500.
Chief Minister Datuk Seri Ab Rauf Yusoh said the proposal was aimed at giving young people better career prospects and encouraging them to build their future locally.
The proposal will be assessed from various perspectives before being submitted to the Federal Government.
