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22 May 2024

Friday, December 30, 2022

'Minimum wage deferment for micro businesses a cabinet decision'


Human Resources Minister V Sivakumar has denied that the deferment of minimum wage for employers with fewer than five workers was done without the cabinet’s consent.

Promising to mitigate the situation, he told Malaysiakini today that the decision was decided by the cabinet last Wednesday (Dec 21).

He was responding to allegations from various quarters that he decided on the deferment on his own accord, after allegedly being influenced by employers.

Among them was Parti Sosialis Malaysia (PSM) deputy chairperson S Arutchelvan who claimed on Twitter today that the decision was not a cabinet decision.

Arutchelvan questioned if the Malaysian Employers Federation had the ear of the newly minted human resources minister. 

Employers who have less than five employees were initially exempted, until Jan 1, 2023, from implementing the Minimum Wage Order 2022 which came into effect on May 1, 2022.

On Tuesday (Dec 27), Sivakumar (aboveannounced a postponement to that exemption for micro businesses, giving them another six months before they have to comply and raise their employee salaries to a minimum of RM1,500 on July 1, 2023.

This decision disappointed workers and stakeholders such as the Malaysian Trades Union Congress (MTUC) and the Labour Law Reform Coalition (LLRC) who claimed the matter was not discussed with workers’ groups before a decision was made.

MTUC secretary-general Kamarul Baharin Mansor claimed the act was a sign of disrespect by the government towards workers.

LLRC co-chairperson N Gopal Kishnam pointed out that workers who were denied the new minimum wage were essentially taking a pay cut.

Gopal reminded the government of Pakatan Harapan’s 2018 election manifesto in which the coalition promised to raise the minimum wage to RM1,500 by sharing the cost difference of RM500 equally with employers.

Mitigative solutions afoot

Sivakumar explained the government was trying to balance the burden on micro businesses recovering from the pandemic while at the same time implementing new benefits introduced in the Employment Act 1955/22.

“SMEs have not recovered fully from the effects of the pandemic and if we include this (raising the minimum wage to RM1,500) it would burden the SMEs further.

“But workers will continue to enjoy new benefits like increased maternity and paternity leave and flexible working hours when the amendments to the Employment Act come into effect Jan 1, 2023.

“So, we are trying to do something for the SME employers and have decided to defer the implementation of the minimum wage (for them) by another six months,” he explained.

However, Sivakumar said the ministry is working on a solution that would mitigate the current situation and hoped to raise it in the cabinet meeting next week.

Remaining tight-lipped on whether the proposal would benefit workers or employers, Sivakumar said: “I am working on a proposal and I hope to bring this up in the next cabinet meeting.

“I don’t want to say anything until I have raised it with the cabinet,” he said. - Mkini

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