Minimum wage rises to RM2,000, gig workers get RM160m package

 

BUDGET 2027 | Prime Minister Anwar Ibrahim announced a series of minimum wage increases and social protection measures for workers while tabling Budget 2027 today.

The national minimum wage will rise from RM1,700 to RM2,000 a month from June next year, with micro, small, and medium enterprises (MSMEs) with sales below RM50 million temporarily exempted due to their struggles with rising costs.

Semi-skilled workers and graduates will also receive a minimum monthly salary of RM2,500, while employees of GLCs and government-linked investment companies (GLICs) have raised their living wage benchmark to RM3,400, up from the previous benchmark of RM3,100.

"I urge employers of privately-owned companies to follow in these steps," Anwar said.

Before the budget announcement, former finance minister Lim Guan Eng (below) had raised concerns about a potential minimum wage hike, citing challenges faced by local businesses.

The Bagan MP said MSMEs were already competing with cheaper overseas manufacturers while grappling with higher taxes and compliance costs amid a relatively sluggish economic environment.

The government has announced that MSMEs would be temporarily exempted from the hike.

Gig worker protections

While tabling the budget themed "Reaching for the Sky, Rooted in the Ground", Anwar also announced a RM160 million package to improve social protection and earnings for e-hailing and p-hailing workers, to be implemented early next year, although the exact date has yet to be determined.

Co-funded by Putrajaya and Grab, the package will help raise minimum income rates, offset vehicle maintenance and insurance costs, and cover contributions to the Social Security Organisation.

Anwar said the package is expected to increase the median monthly net income of e-hailing workers by RM227, while p-hailing delivery riders will see an increase of RM100.

The government will also provide a 35 percent Socso contribution incentive for e-hailing and p-hailing workers.

“The incentive will be increased from 18 percent to 50 percent if platform companies also bear the cost of worker contributions,” said Anwar, who is also the finance minister.

He said the measures were intended as a stopgap while the Gig Workers’ Consultative Council finalises minimum income rates, income formulas, and minimum social protection standards. The council is expected to conclude its negotiations by early next year.

To boost retirement savings, the government will offer e-hailing and p-hailing workers an Employees Provident Fund incentive of up to RM600 annually, capped at RM6,000 over their lifetime.

"Bank Simpanan Nasional and Agrobank are allocating RM270 million to provide financing for gig workers who wish to start a business or purchase their first home," Anwar added.

Separately, the government will provide a matching incentive covering 70 percent of Socso contributions for 200,000 self-employed individuals across 17 sectors where coverage is not mandatory. - Mkini