PETALING JAYA: The proposed RM2,500 starting salary for graduates and semi-skilled workers should remain a guideline, with employers warning that making it compulsory could raise business costs and affect hiring.
The Malaysian Employers Federation (MEF) and SME Association of Malaysia said they support efforts to improve workers’ earnings but stressed that wage policies must consider productivity, job responsibilities and employers’ financial capacity.
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MEF opposed introducing another tier of compulsory wage-setting based on academic qualifications or skills certificates beyond the existing statutory minimum wage framework under the National Wages Consultative Council Act 2011 (Act 732).
It said starting salaries should reflect job requirements, demonstrated competencies, relevant experience, productivity, market conditions and employers’ ability to sustain employment.
Making qualification-based starting salaries compulsory could raise recruitment and payroll costs potentially affecting entry-level opportunities for fresh graduates and workers who require further training, it warned.
MEF cautioned that the proposal could lead to wage compression, narrowing the salary gap between new entrants and experienced employees and creating pressure for wider pay adjustments.
The federation urged the government to conduct a comprehensive regulatory and economic impact assessment and consult employers and workers before amending legislation to make qualification-based starting salaries compulsory.
On the proposed e-Wages module, MEF supports efforts to strengthen compliance with labour laws and ensure timely and accurate salary payments.
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It also called for clear guidelines, sufficient transition time and safeguards for sensitive employee and payroll information.
Human Resources Minister Datuk Seri R. Ramanan said the minimum wage would increase from RM1,700 to RM2,000 a month from June 2027, with MSMEs recording annual sales below RM50mil exempted to allow them time to adjust.
The proposed RM2,500 starting salary framework would initially be introduced through guidelines, although the government intended to amend Act 732 to allow mandatory minimum salaries for graduates in the future.
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SME Association of Malaysia president Dr Chin Chee Seong welcomed the clarification that the starting salary would initially be a guideline rather than a mandatory requirement.
He said this would provide some breathing space for SMEs grappling with rising operating costs and shrinking profit margins.
However, Chin said the association remained concerned about plans to eventually make qualification-based starting salaries compulsory.
“Academic qualifications alone should not determine salaries. Actual job responsibilities, skills, experience, productivity and employers’ financial capacity must also be taken into consideration.”
Chin also welcomed the exemption for MSMEs with annual sales below RM50mil from the RM2,000 minimum wage requirement, but cautioned that businesses could still face indirect cost pressures across supply chains.
He added that Malaysia could not achieve a high-income economy simply by raising salary benchmarks without improving business competitiveness.
He urged the government to consult industry stakeholders, allow time for businesses to adjust and provide incentives, skills training and productivity support before imposing a mandatory salary framework.
