Minimum Wage System

MINIMUM WAGES ORDER/ PERINTAH GAJI MINIMUM

Official Website: http://minimumwages.mohr.gov.my/index.php/ms/?question=0

IMPLEMENTATION OF MINIMUM WAGE SYSTEM

On 1^st January, 2013, the minimum wage system was officially launched in Malaysia. An employer of more than 5 employees (including foreign workers) should adopt the minimum wage structure, and whereas an employer of 5 employees or fewer should implement on the 1^st July, 2013.

Under the minimum wage system, the minimum wage shall be RM900 per month or RM4.33 per hour for employees in Peninsular Malaysia, and the rate will be RM800 per month or RM3.85 per hour for East Malaysia.

Minimum Wages Order 2016 comes into operation on 1/7/2016. This order shall apply to all private sector workers (except domestic servant), regardless of the number of employees they have. Monthly salary shall be not less than RM1,000 (RM4.81/hour) in the Peninsular Malaysia, and RM920 (RM4.42/hour) in Sabah, Sarawak and Labuan.

Minimum Wages Order (Amendment) 2018 comes into operation on 1/1/2019 that the minimum wage be raised to RM1,100 nationwide. This order shall apply to all private sector workers (except apprentice & domestic servant), regardless of local or foreign employees.

Minimum wages is basic wages, excluding any allowances or other payments.

Minimum Wages Order 2020

On 10 January 2020, the Human Resources Ministry announced an anticipated increase in the minimum wage for employees working in the country’s 56 city and municipal council areas, including Kota Kinabalu, Sandakan and Tawau in Sabah state.

The minimum wage increase has been gazetted and will come into effect on 1 February 2020. Wages will change for city and municipal council employees in the following ways:

Minimum monthly wage will be RM1,200.00
Minimum hourly wage will be RM5.77
Daily minimum wage rates will depend on the number of days in a work week:
- 6 working days = RM46.15
- 5 working days = RM55.38
- 4 working days = RM69.23

Outside those 56 city and municipal councils:

Minimum monthly wage will be RM1,100
Minimum hourly wage will be RM5.29
Daily minimum wage rates will depend on the number of days in a work week:
- 6 working days = RM42.31
- 5 working days = RM50.77
- 4 working days = RM63.46

All minimum wage rate categories also apply to employees who are not earning hourly, weekly, or monthly wages. That means employees who are paid on a piece rate, by tonnage, task, trip, or commission, must be paid the equivalent of the minimum wage.

The minimum wage rates do not apply to employees who are classed as ‘domestic servants’ under the relevant section of Employment Act 1955.

On 19 March, 2022, Prime Minister Datuk Seri Ismail Sabri Yaakob announced that Malaysia will implement the RM1,500 minimum wage starting May 1. He said the implementation would first involve large and government-linked companies (GLCs).

On 13 April, 2022, Human Resources Minister Datuk Seri M. Saravanan said several employment sectors, including the informal sector, will be given flexibility when the implementation of the RM1,500 minimum wage rate comes into effect on May 1. Among them are farmers and those earning income by doing odd jobs (Those workers are still earning RM500 to RM600 salary), companies employing less than five workers and those that are facing huge losses like the hotel, hospitality and tourism sectors.

Source: The Borneo Post (14-4-2022) – Some employment sectors, companies less than 5 employees and suffered losses to be given exemption

Minimum Wages Order 2022 (Latest)

On 27 April 2022, the new minimum wage of RM1,500 a month effective May 1 was officially gazetted 220427 Minimum Wages Order 2022. According to the gazette under Paragraph 4, the monthly wage rate payable to the employee shall not be less than RM1,500. This paragraph shall apply to an employee employed by an employer who employs five or more employees, also applies to an employee regardless of the number of employees employed, an employer who carries out a professional activity classified under the Malaysian Standard Classification of Occupations (MASCO) as published officially by the Ministry of Human Resources; In addition the gazette states that the implementation for an employer who employs less than five employees will only take effect on January 1, 2023. Meanwhile, in relation to an employee who is paid according to the place of employment for the period May 1 to Dec 31, the monthly wage is RM1,200 in City Council or Municipal Council areas and RM1,100 for areas other than City Council or Municipal Council areas.

Minimum monthly wage will be RM1,500.00
Minimum hourly wage will be RM7.21
Daily minimum wage rates will depend on the number of days in a work week:
- 6 working days = RM57.69
- 5 working days = RM69.23
- 4 working days = RM86.54

On 27 December 2022, the Human Resources Minister V. Sivakumar in a statement said the implementation of the Minimum Wage Order (PMG) for employers with less than 5 workers has been postponed again from Jan 1 to July 1, 2023.