KUALA LUMPUR, Oct 9 — The Malaysian government today announced an increase in the minimum wage from RM1,700 to RM2,000, effective June 2027.

Prime Minister Datuk Seri Anwar Ibrahim also said micro, small and medium enterprises (MSMEs) with annual revenues of less than RM50 million would be exempted from the increase to give them time to adapt their business models.

“The gap between workers’ productivity and wages must be narrowed, as the cost-of-living burden stems from incomes failing to keep pace with rising prices.

“This means more than four million workers will be covered by the new minimum wage rate,” he said while tabling Budget 2027 at the Dewan Rakyat earlier today.

He also said the government will also introduce a minimum monthly salary of RM2,500 for semi-skilled workers and graduates as a starting point, as part of reforms to the country’s wage framework.

“The minimum wage only raises the income floor for workers, while wages for skilled workers remain disproportionate to their qualifications,” he said.

He also welcomed the commitment by government-linked investment companies (GLICs) and government-linked companies (GLCs) to raise their living wage benchmark from RM3,100 to RM3,400 a month which benefited about 230,000 workers.

Anwar said several major employers in the banking and oil and gas sectors had also introduced more reasonable wages, urging all private-sector employers to follow suit.

To curb the employment of undocumented foreign workers, he said companies other than MSMEs can only claim tax deductions for salary expenses if the wages are paid through bank accounts in accordance with payment methods permitted under the Employment Act.