KUALA LUMPUR: The Malaysian Employee Federation (MEF) has praised the decision to raise the minimum wage from RM1,500 to RM1,700 per month, effective Feb 1 next year.
Its president Datuk Dr Syed Hussain Syed Husman said that the new minimum wage was just the starting point.
He urged employers who could afford to pay more to do so, adding that most already paid above the minimum wage.
"No one should use the minimum wage as an excuse for salary levels. It is ethical and good practice for employers to compensate their employees based on performance, both individually and at the business level," he said in a statement.
Prime Minister Datuk Seri Anwar Ibrahim announced the increase during the tabling of the 2025 Budget in Parliament, specifying that the new minimum wage would apply to employers with five or more employees.
Syed Hussain also commended the government for considering the challenges faced by micro and small-medium enterprises (MSMEs) when determining the new minimum wage rate.
He welcomed the reasonable grace period granted to employers, particularly for micro enterprises with fewer than five employees, which will have an additional six months to implement the RM1,700 minimum wage.
The minimum wage was last updated to RM1,500 per month on May 1, 2022, for all employers except for micro-businesses.
The increase was deferred for micro-businesses until Jan 1, 2023, when the RM1,500 wage became applicable nationwide.
"It's crucial for stakeholders to recognise that the majority of businesses in Malaysia are MSMEs. There are significant differences between urban and rural businesses, and any decision regarding minimum wages must take these factors into account.
"Multinational corporations, government-linked companies, and large local firms do not typically face minimum wage issues; the challenge lies with the MSMEs," he said.