Minimum Wage Of RM1,700 Also Applies To Foreign Workers

KUALA LUMPUR, Oct 19 (Bernama) -- The Minimum Wage Order of RM1,700, which will take effect from February next year, applies to all workers, including non-citizens in the private sector, except for domestic workers and apprenticeship contracts.

According to the frequently asked questions (FAQ) on the order prepared by the National Wages Consultative Council Secretariat, the minimum wage policy must not discriminate against any worker on the grounds of nationality, in line with the ILO Equal Remuneration Convention (No. 100), which Malaysia ratified in 1997.

Furthermore, Section 69F of the Employment Act 1955, Section 118B of the Sabah Labour Ordinance (Chapter 67), or Section 119B of the Sarawak Labour Ordinance (Chapter 76) prohibit any form of discrimination between local and foreign workers.

“Employers are required to pay the minimum wage rate to employees, even if the employee agrees to be paid a basic wage lower than the minimum wage, in accordance with Section 43 of the National Wages Consultative Council Act 2011 (Act 732),” it said.

Prime Minister Datuk Seri Anwar Ibrahim, when tabling Budget 2025 yesterday, announced that the government had agreed to raise the minimum wage from RM1,500 to RM1,700 per month, effective Feb 1, 2025.

Anwar, who is also Finance Minister, said the government had decided to delay the implementation of the RM1,700 minimum wage for employers with fewer than five employees by six months until Aug 1, 2025.

It added that the Minimum Wage Order of RM1,700 applies to employers with five or more employees, as well as employers engaged in professional activities regardless of the number of employees.

According to the Malaysian Standard Classification of Occupations (MASCO) 2020, there are nine major sub-groups of professional activities: science and engineering professionals, health professionals, teaching professionals, business and administration professionals, as well as information and communication technology (ICT) professionals.

Others are legal professionals, hospitality and related services professionals, social and cultural professionals, and regulatory body professionals.

It said employees who are not paid a basic salary but are paid wages based on piece rates, tonnage, task rates, travel, or commission must receive a monthly wage that is no less than the current minimum monthly wage of RM1,700.

According to the FAQ, the implementation of the order does not conflict with employers who adopt the Productivity-Linked Wage System (PLWS), provided that employees do not receive less than the minimum wage rate.

Additionally, the Minimum Wage Order will not be replaced by the Progressive Wage Policy, as that policy complements the minimum wage and is implemented voluntarily by employers.

With the gazetting of the 2024 Minimum Wage Order, the 2022 order is revoked, but any legal proceedings, prosecutions, or investigations initiated under the 2022 order will continue until completed.

“All service contracts and collective agreements must take into account all provisions in the 2024 order,” according to the FAQ.

The Minimum Work Order is enforced by the Department of Labour Peninsular Malaysia (JTKSM), the Department of Labour of Sabah, and the Department of Labour of Sarawak, and any violations can be reported to the relevant authorities.

Employers who fail to comply with the order may face penalties ranging from RM1,000 to RM20,000, or imprisonment for up to five years.

-- BERNAMA