PETALING JAYA: The increase in the national minimum wage to RM2,000 reflects the government’s commitment to improving workers’ incomes and living standards, says Malaysian Employers Federation (MEF) president Nik Mustapha Nik Mohamed.
He said the timeframe given to employers to implement the increase was reasonable, as it would allow businesses sufficient time to plan and prepare for the changes.
“Giving employers until June 2027 to implement the increase is a sensible step that gives businesses time to plan, adapt and prepare for implementation while minimising disruption to employment and business operations,” he said.
However, he stressed that a balanced approach was essential to ensure efforts to improve workers’ welfare did not undermine business viability and sustainability.
MEF senior adviser for government, media and international engagement, Datuk Dr Syed Hussain Syed Husman, also emphasised that wage increases involved more than adjustments to basic salaries, as they would also have a significant impact on statutory contributions and overtime costs.
Prime Minister Datuk Seri Anwar Ibrahim announced when tabling Budget 2027 that the national minimum wage would be increased by RM300, from RM1,700 to RM2,000 a month, effective June 2027.
Anwar, who is also Finance Minister, said micro, small and medium enterprises (MSMEs) with annual sales revenue below RM50mil would be exempted to give them time to adjust their business models.
However, SME Association of Malaysia national president Dr Chin Chee Seong said the exemption would not completely shield MSMEs from rising labour costs.
“Higher wages in larger companies will create pressure on smaller businesses through increased supply chain costs, salary expectations and competition for workers.
“We support improving workers’ incomes, but wage increases must be sustainable and supported by productivity growth. Otherwise, businesses may be forced to raise prices, freeze hiring, reduce their workforce or postpone expansion,” he said.
Chin added that annual sales revenue alone should not determine a company’s ability to absorb higher wages.
“A business with RM40mil in revenue but very thin profit margins may face greater financial pressure than a more profitable company with RM60mil in sales.”
He urged the government to consider profitability, cash flow, labour intensity and sector-specific conditions when formulating wage policies, saying these factors would better reflect businesses’ actual financial capacity than annual revenue alone.
“We must encourage MSMEs to grow, not discourage expansion,” he said.
Malaysian Trades Union Congress secretary-general Kamarul Baharin Mansor said exempting certain MSMEs from the minimum wage requirement would create further confusion and discrimination among workers.
“Employees performing similar jobs could receive different wages depending on the status of their employers,” he said.
Kamarul said workers at exempted MSMEs would also face financial pressure, as they continued to pay the same prices for goods as other workers.
“If the government fails to monitor the situation or allows some MSME workers to continue receiving lower wages than employees of other companies, this could affect workers’ morale and their perception of the government,” he said.
