KUALA LUMPUR, Nov 30 — Minister of Economy Rafizi Ramli told Parliament this evening that the Anwar administration aims to run a pilot of its progressive wage programme by June next year, with up to a thousand companies involved.

Rafizi outlined the target in a much-anticipated White Paper tabled in the House of Representatives this afternoon that underscores the unity government’s bid to boost workers’ income after decades of stagnation, which Prime Minister Datuk Seri Anwar Ibrahim has made a main key performance indicator.

“The implementation of the Progressive Wage Policy will begin with a pilot project in June 2024 involving 1,000 companies,” the minister said in the paper.

“Which company gets chosen will reflect our policy, sectoral needs and equality. An impact assessment on the pilot project will be done before the Progressive Wage Policy is implemented in full force,” he added.

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The incentive-driven and voluntary progressive wage programme will prioritise workers in small and medium enterprises (SMEs), Rafizi said in Parliament today as he tabled the White Paper on the progressive wage policy that has drawn support from workers but scepticism from employers.

In it, he detailed a delivery mechanism that will primarily be driven by cash incentives supplemented by federal funds.

Rafizi said companies defined as “entry-level” that voluntarily opt in will be given up to RM200 per worker for the first 12 months, on the condition that they raise salaries yearly either by matching or paying more.

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Companies at the “non-entry level” will receive RM300 per worker, he added.

The programme is expected to cost the federal government RM2 billion, but Rafizi suggested it could change depending on Putrajaya’s “financial situation”.

Local SMEs will be the primary target for participation even if approval will be on a first-come first-served basis. Participating companies will then be rated through a “star system,” which Rafizi said is aimed at spurring competition that would encourage companies to offer “competitive” salaries.

The better the company pays, the more stars it will get and, therefore, attract more talents.