Employers moot weighted minimum wage by region

Gan claimed that the increased minimum wage has been burdensome for smaller businesses. — Picture by Saw Siow Feng
Gan claimed that the increased minimum wage has been burdensome for smaller businesses. — Picture by Saw Siow Feng

IPOH, Feb 28 — Employers suggest enforcing the RM1,1000 minimum wage only in limited areas instead of nationwide as not all businesses could afford this.

Federation of Malaysian Manufacturers Perak chairman Datuk Gan Tack Kong suggested this be implemented according to the urban-rural divide and argued that living costs differed according to areas.

“The minimum wage of RM920 or even RM1,100 is still not sufficient for those working in urban areas like Kuala Lumpur. But it’s different in the places like Perak and Kelantan, especially in the rural areas there,” he told Malay Mail.

“Most of the business operators in these states are small and medium-sized entrepreneurs, who will find it difficult to pay the extra RM180 for the monthly salary of the workers,” he added.

Gan claimed that any increase to the minimum wage was burdensome, especially to smaller businesses.

He also asserted this could encourage businesses to move to rural areas in order to take advantage of the wage difference.

“It will help out the locals to get employment and at the same time business operators do not need to pay higher salarie.

“It would be a win-win situation for both the employers and employees,” he said.

On Monday, the Human Resource Ministry conceded that the minimum wage of RM1,100 is too high for some sectors and would review the policy following complaints from some employers.

The minimum wage was previously set at RM920 and was increased to RM1,100 nationwide on Jan 1 this year. 

Malaysian Employers Federation director Datuk Shamsuddin Bardan points out that the increase in the minimum wage outpaced the 5 per cent productivity increase in the previous two years.

“Workers in Peninsular recorded increased overtime of about 10 per cent, while for East Malaysia it was about 12.9 per cent,” he said.

Shamsuddin also said companies will have a difficult time arranging the wage scheme as any increase in the minimum level will force them to adjust wages for different categories in order to maintain internal equity. 

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