Minimum wage rate under review

Malaysia is undertaking a review of its national minimum wage, which currently stands at RM1,700 per month. The outcome of this review will determine whether the current rate is maintained or adjusted to a new level. This process aligns with Section 25 of the National Wages Consultative Council Act 2011 (Act 732), with the final decision expected after the National Wages and Gig Council (MPGGN) finalizes the new rate.

Minister of Human Resources Datuk Seri R. Ramanan stated that the review incorporates fundamental indicators such as the Poverty Line Income (PLI) and median wages to assess workers' basic needs and employers' capacity to pay. Additionally, the rate is informed by adjustment indicators, including the Consumer Price Index (CPI), labor productivity, and unemployment rates. While the ministry has not conducted a specific study on a "living wage," Bank Negara Malaysia introduced the concept in 2018, estimating a living wage of RM2,700 for a single individual in Kuala Lumpur.

The government is also implementing a Progressive Wage Policy (PWP) as a complementary measure to the minimum wage system, aiming to shift the wage structure from a basic floor to compensation aligned with skills. According to Ramanan, 5,910 employers have applied for the PWP, with 4,025 (68.1%) having already increased their employees' wages and claimed incentives. This initiative has benefited over 51,363 workers, exceeding the initial target of 50,000.

To date, the government has disbursed over RM73 million in PWP incentives. Approximately RM10.2 million was allocated for entry-level workers (within the first 12 months of employment), while RM62.9 million supported non-entry-level workers employed for over 12 months. Companies that meet the PWP criteria can receive monthly incentives of up to RM200 for entry-level staff and up to RM300 for non-entry-level staff.