Malaysia will increase the minimum wage from the current RM1,500 to RM1700 from February 2025. Tabling Budget 2025 in the Dewan Rakyat today, Prime Minister Datuk Seri Anwar Ibrahim said that employers with less than five workers will be given a six-month deferment, until August 2025. Datuk Seri Anwar, who is also the Finance Minister, said that the Human Resources Ministry will also publish a set of guidelines for the starting salaries of industrial and production technicians (RM2,290), mechanical engineers (RM3,380) and professional creative content designers (RM2,985).
Datuk Seri Anwar added that following the pilot programme for the Progressive Wage Policy in June, it will be fully implemented next year, with a budget of RM200mil benefiting 50,000 workers.
In a related development, the Finance Ministry announced that the National Wages Consultative Council’s role will be strengthened, including through benchmarking against similar organisations overseas, to provide a more holistic wage ecosystem and lessen disparities. According to the Economic Outlook 2025 report released by the Finance Ministry, the Fair Work Commission in Australia and the National Wage Council in Singapore are examples of organisations that may be used as benchmarks. The report said the government will improve collective bargaining coverage through better collaboration to enhance wage structure and non-wage benefits. “The government is exploring the provision of starting salary guidelines, taking into consideration various aspects, including workers’ educational qualifications, experience, skills category and location for better compensation,” the report said.
In addition, under the GEAR-UP initiative, government-linked investment companies (GLICs) and government-linked companies (GLCs) are committed to setting an example for the corporate sector by seeing that all employees in their organisations and ecosystems receive a decent monthly living wage, aligning future adjustments with productivity improvements. “Collectively, these measures will help build a more balanced wage-setting mechanism that can significantly boost productivity and business expansion, leading to higher compensation of employees and fostering inclusive economic development,” the report added.
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