22-3-2022

The National Chambers of Commerce and Industry of Malaysia (NCCIM) urges the Government to delay the implementation of new minimum wage until sufficient engagement with the stakeholders. The new minimum wage will apply to large companies (employers hire more than five employees) and government-linked companies (GLCs).

NCCIM President Dato’ Low Kian Chuan said, the business community was caught by surprise with an abrupt announcement of a steep increase of between 25.0%-36.0% in minimum wage to RM1,500 per month from the current RM1,100-RM1,200. Pending more clarity of the details, it has caused adverse reactions and anxieties among many industries and employers as the timeline of implementation is too short for the employers to make preparation.

He said, in the past practices, there was sufficient engagement and timeline for the implementation of minimum wage. Therefore, NCCIM would like to have an engagement with the Ministry of Human Resources for better clarity of the new minimum wage mechanism (what are the exceptions?) so as to come out an appropriate level of minimum wage in balancing between the welfare of employees and the cost impact on employers before its implementation.

“Our deep concern is that the increase in minimum wage comes at a time when businesses are facing substantial increases in business costs, experiencing the worker shortages and cautious consumer spending. Imposing additional labour costs on businesses could force impacted business owners to raise prices (consumer inflation) and reduce employment to preserve their business margin. The knock-on effect of proposed minimum wage on other categories of workers will add to higher employment and operating costs.”

He added, business community needs breathing space to rebuild their business as they are still reeling from the economic and business shocks inflicted by the two years long of the pandemic impact. Most businesses are not financially stable to implement the proposed new minimum wage as their cashflow and revenue are still on the mend and have not fully restored back to pre-pandemic level.

In this regard, NCCIM would like the Government to take into consideration current economic and business conditions as well as cost and business competitiveness implications on domestic businesses when implementing the new minimum wage. The factors are listed in Appendix.

Dato Low reiterates that NCCIM look forward to engaging in a more in-depth discussion with the Government on reaching an amicable approach to implement the new minimum wage without significantly disrupting the economic and business recovery track and more importantly, resulting in higher consumer inflation pressure.