KUALA LUMPUR, Feb 10 — The Small and Medium Enterprises Association of Malaysia (Samenta) today urged the Human Resources Ministry to focus on reforming the country’s labour laws to keep up with the gig economy and the reality of a post-pandemic age.
In a statement today, Samenta Central chairman Datuk William Ng said the group did not oppose Minister Datuk Seri M Saravanan’s announcement that the minimum wage would be raised to around RM 1,500 by the end of 2022, but wanted the government to align this with the country’s economic output.
Ng also said that Malaysia’s labour productivity declined by 5.6 per cent in the third quarter of 2021.
“The way forward for Malaysia and our workforce is to link income to productivity. The Productivity-Linked Wage System or PLWS, which counts the Ministry of Human Resources as among its champions, is seeing a lot of interests among businesses, including SMEs. However, our labour laws, including the Employment Act 1955, are still time-based, meaning that any attempt at implementing PLWS would have to be on top of a time-based monthly salary, and not instead of it.
“In more developed countries, such as Australia, it is common for employees to be paid based on output. Housekeepers in hotels, for example, are paid for rooms cleaned rather than hours worked. When occupancy is high, the employees make substantially more and hence gaining a larger share in the business prosperity,” he said
Ng added that the said model has “worked quite successfully” in the ride hailing industry locally, with riders being paid primarily by jobs completed rather than by hours worked.
“The interests of both businesses and working Malaysians are best served when income are tied to productivity, rather than a minimum wage premised upon workers working a fixed number of hours,” he added.
Economic experts told Malay Mail recently that raising the minimum wage in Malaysia will not be detrimental to the economy or businesses, contrary to what some employers have claimed.
They said there was not enough empirical evidence to support the argument that raising the minimum wage ceiling now would torpedo an already flailing economy as suggested by Malaysian Employers Federation (MEF) president Datuk Syed Hussain Syed Husman over the weekend.
Syed Hussain’s argument for not increasing the minimum wage was that MSMEs were already suffering and even a small increase in business cost would aggravate their plight and they might close down, what more with an increase of RM300-RM400 per month on top of the existing national minimum wage.
He said doing so would push up the cost of goods and services as well as operations costs indefinitely, adding that a salary adjustment would demotivate employees whose salaries are already above the minimum wage.
Putrajaya proposed to increase the minimum wage from RM1,200 to RM1,500 and are contemplating when to do it, although the tentative date is said to be in the fourth quarter of 2022.
