PETALING JAYA, Sept 22 ― Employers who run small or micro businesses are facing challenges to meet the Minimum Wage Scheme that was implemented on January 1 this year as they do not have capacity to fork out the minimum wages for their workers.
Subsequently, the Malaysian Employers Federation (MEF) is calling for the National Wages Consultative Council to recommend for the scheme to be reviewed and come up with a mechanism to facilitate the implementation.
“There should be different level of wages depending on sectors, region and types of employment. It cannot be RM900 in all areas,” said MEF secretary Datuk Shamsuddin Bardan.
“If it is RM900 in remote and rural areas, then that is too much. There must be a different rate to be paid in different areas of the country. Bigger cities and towns can afford to pay more but smaller village businesses should be allowed to pay less,” he said.
He said employers who run micro-businesses faced problems paying out the RM900 minimum wage.
“These employers would probably have five employees or less and they cannot simply pay the rate. These businesses could also be located at remote areas and some of these businesses do not even make RM900 a day.”
Shamsuddin said this led to the possibility of such businesses shutting down.
“Employers of small businesses have expressed there was a 60 per cent increase on wages with the implementation of the scheme. Small organisations cannot afford it because their margin is small and by enforcing the scheme, this will be pushing the marginal employers to do the impossible.”
Shamsuddin said the Human Resources Ministry should have looked into this matter before implementing the scheme because employers who are unable to comply would be prosecuted.
“If the employers can pay, then they do not risk being prosecuted by the Labour Department but those who are unable to pay, are sent to jail. The authorities should have looked into this matter before implementing it but instead, they authorities thought otherwise.”
The issue of employers not paying out minimum wage has come to light with reports that about 10,000 employers in the private sector have yet to implement the scheme.
Deputy Human Resources Minister Datuk Seri Ismail Abd Muttalib said the number represented was only five per cent of 200,000 employers registered with the Labour Department and the government viewed the matter seriously.
The minister also said that employees have the right to lodge a complaint with the Labour Department and his ministry if their employers are unable to meet the policy.
According to records with the ministry, three employers have been taken to court.
According to the National Wages Consultative Council Act 2011, errant employers can be fined if found guilty while repeat offenders face the possibility of jail time of not more than five years.
Shamsuddin said this matter could be resolved if the ministry was practical about the whole implementation.
He said the authorities needed to look at the reasons as to why the companies are unable to comply and provide assistance instead of prosecuting them.
Shamsuddin pointed out there was also the possibility it would discourage entrepreneurship as individuals would be unwilling to have a small business start-up.
