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Malaysia to raise inimum wage in July

  • Neville Spykerman

    The Star/ANN

Kuala Lumpur   /   Mon, May 2, 2016   /  07:49 pm
Malaysia to raise inimum wage in July Malaysian Prime Minister Najib Razak delivers his opening speech at a conference in Kuala Lumpur, Malaysia, Jan. 25. (AP/Joshua Paul)

Come July, the minimum wage will be raised to RM1,000 (US$255.7) for workers in peninsular Malaysia and RM920 for those in Sabah, Sarawak and Labuan as announced in Budget 2016.

Addressing workers on Labor Day Sunday, Prime Minister Najib Razak said the government was also considering putting into place an insurance scheme to help both workers and employers to cope with a more demanding labor market.

“The new minimum wage, effective from July 1, is an increase of RM100 [11%] for workers in peninsular Malaysia and RM120 [15%] for Sabah, Sarawak and Labuan,” he said during the national-level celebration attended by over 5,000 workers at the Putra World Trade Centre.

With the new minimum wage to boost productivity, Najib said the government expected a more equitable distribution of income between capital owners and workers.

The implementation of the national minimum wage policy in 2013, he pointed out, had already benefited 1.9 million private sector workers, which was later extended to the public sector via a new salary scale as announced recently.

The Employment Insurance Scheme (SIP), he said, was to better protect employees as well as make it easier for employers to run businesses.

The SIP, he said, was aimed at helping workers who had been laid off with their expenses until they found new jobs, including employment counselling services to improve their chances of landing new jobs.

Training programs by SIP, he said, would also allow employers to improve the skills of their workers and pay them accordingly.

“The scheme will help employers adapt their organization to changes in technology and business structure while reducing the stress of bankruptcy or downsizing.

“The risk of conflict due to layoffs can be reduced because SIP will provide protection to employees during periods of temporary unemployment,” he said.

Najib said details of the scheme, which was being worked out, would be announced after the engagement process with all parties, adding that “this will be a shared responsibility between employers and workers”. 

Malaysians facing higher costs of living, added Najib, should not only view this from the aspect of the cost of goods and services but look towards striving to increase their skills and capabilities through education for access to higher-income jobs.

“High income can only come through high levels of skills and education and increasing productivity,” he said, adding that a country’s survival was dependent on its ability to innovate and to think out of the box to generate wealth.

In conjunction with Labor Day, Najib also launched a new mobile application called i-Perkeso, allowing workers to directly connect with Socso and help the organization improve its services.

He also announced a new Occupational Safety and Health Master Plan for 2016 to 2020, adding that the previous plan had successfully reduced work-related accidents from 49,598 cases in 2006 to 42,148 cases in 2014 and fatalities were reduced from 7.24% to 4.21%.

Also at the celebration were Human Resources Minister Richard Riot and Chief Secretary to the Government Ali Hamsa.

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