Minimum Wages Order 2016 : Employers ‘cannot cope’ - Labour Law Blog

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Jun 28, 2016

Minimum Wages Order 2016 : Employers ‘cannot cope’

Many employers are ill-prepared for the Minimum Wages Order 2016 (MWO 2016), which will come into effect on Friday. Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan said the current economic situation was not conducive for most employers.
“This can become a real challenge for employers as they are trying to contain costs, but they have no choice except to implement this policy when it takes effect.
“My main concern is that the employers may end up having to reduce their manpower to keep costs in check, and this will negatively affect workers both local and foreign,” he said.
In MWO 2016, the minimum wages set are according to region, namely RM1,000 per month or RM4.81 per hour for peninsular Malaysia, and RM920 per month or RM4.42 per hour for Sabah, Sarawak and Labuan. For workers paid on a piecework, tonnage, trip or commission basis, the monthly salary shall not be less than RM1,000 in peninsular Malaysia, and RM920 in Sabah, Sarawak and Labuan.
The order will involve all employers in the private sector, regardless of the number of employees they have, except domestic helpers (maids). Shamsuddin cited the hotel industry as an example of poor implementation of minimum wage based on the 2012 minimum wage order.
He said the workers would actually be earning the stipulated minimum wage or more if extra benefit such as service charges were to be added to their basic pay. “They have a payment system through service charges, and some employers have used that system to add on to the basic salary for their workers.
The basic payment may be lower than the current RM900 minimum wage but employers use service charge funds to increase the pay to at least the minimum wage. “Since the minimum wage was implemented, the industry has been grappling with the issue since October 2013, and it has yet to be resolved,” he said.
Meanwhile, Masterbuilders Asso­ciation Malay­sia president Matthew Tee said the industry players would not be heavily affected by the new order. “We had no problems when it was at RM900, and now that it will be raised to RM1,000, we are already paying well and above that amount at this moment.
“It is our method to entice more people into our industry, because it is difficult to attract new talent into this business,” he said.
pic : says

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