PUTRAJAYA: To implement the proposed minimum wage increase to RM2,000, the government will introduce an e-wages system next June, featuring a live dashboard to monitor employers’ compliance with minimum wage regulations, says Datuk Seri R. Ramanan.
The Human Resources Minister said this was to ensure workers receive their salaries on time and that the system was also expected to help the government gather more comprehensive wage data, particularly on skilled workers across different occupational categories.
“More than four million workers were expected to benefit from the minimum wage increase. However, the number of skilled workers who would benefit according to categories 1 to 8 of the Malaysia Standard Classification of Occupations (Masco) could not yet be determined due to limitations in the available data.
“This is precisely why we need e-Wages. The system will help us obtain the necessary data,” said Ramanan, adding that existing information primarily covered workers earning the minimum wage.
At a media conference held Friday (Oct 16), Ramanan revealed the new proposed guidelines and the framework of the e-wages system.
“The minimum wage will increase from RM1,700 to RM2,000 per month starting in June 2027.
“Micro, small and medium enterprises (MSMEs) with annual sales below RM50mil will be exempted to give them time to adjust,” said Ramanan.
A starting basic salary framework of RM2,500 per month will be instituted for graduates and semi-skilled workers to better reflect workers’ educational qualifications, skills and job responsibilities.
“This initiative forms part of the government’s broader effort to develop a more skilled, better-paid and protected workforce.
“The Ministry is preparing comprehensive starting salary guidelines based on Masco and the guidelines will cover different occupations and qualification levels, providing clearer salary references for employers and workers.
“For graduates, the initial guidelines will cover Masco categories 1 to 3, including degree and diploma holders and individuals with specified Malaysian skills qualifications.
“For semi-skilled workers, the framework will align with existing skills-based starting salary guidelines, including holders of Malaysian Skills Certificates (SKM) Levels 1 and 2.
“Wage monitoring covers all workers, including non-Malaysian employees.
“Starting salary benchmarks will be updated using the latest data from the Statistics Department of Malaysia (DOSM) and the information will be published through the e-Masco portal.
“The guidelines are targeted for publication alongside the new Minimum Wages Order in June 2027.
“We intend to amend the National Wages Consultative Council Act 2011 (Act 732).
“The proposed amendments would introduce educational qualifications as a factor in minimum wage determination, enabling mandatory minimum wages for graduates in the future.
"This change is necessary because the current Act does not specifically provide for minimum wages based on educational attainment,” said Ramanan.
He said the reforms would reduce wage compression and ensure compensation better reflects the skills and qualifications required for different occupations.
“Under the 13th Malaysia Plan (RMK13), the government aims to achieve a median salary of RM3,500 and increase employees’ compensation to 40% of gross domestic product (GDP) by 2030,” said Ramanan.
He further explained that that the policy had been carefully calculated to ensure the economy could sustain higher wages without placing excessive pressure on businesses or triggering significant inflationary effects.
According to Ramanan, the government had taken various economic considerations into account to ensure the wage increase would be sustainable.
“The system will provide a live dashboard to ensure that companies comply with the established regulations and that employees receive the wages they are entitled to on their designated payday.
“Of course, some companies are not entirely happy with the decision. They have shared their views. The National Wages Consultative Council has also reviewed extensive data collected from various ministries and industry players before arriving at this carefully calculated decision.
“This decision has been carefully considered and planned to ensure that the economy can sustain the wage increase,” said Ramanan.
On the requirement for companies with sales and revenue having a threshold of more than RM50mil to implement, the minister said that companies will be assessed as a whole rather than examining their components separately.
“For example, if a subsidiary belongs to a holding company or parent company, we must assess the entire group. The company will therefore be evaluated based on its overall tax and income classifications. Its total turnover will be taken into account rather than assessing each entity individually.
“Nevertheless, we also welcome companies with turnover below the RM50mil threshold to adopt the RM2,000 minimum wage voluntarily. We welcome and encourage them to do so,” said Ramanan.
He further said that the laws to make the minimum wages mandatory would be expedited.
“We will bring them forward as soon as possible. We need to prepare the necessary papers.
“There are many measures we want to implement, and we intend to introduce them as soon as possible. The measures are expected to be implemented before June 2027, as their implementation is mandatory,” said Ramanan.
