MTUC urges targeted aid instead of blanket minimum-wage exemption
GEORGE TOWN: The Malaysian Trades Union Congress (MTUC) Penang has questioned the government’s temporary minimum-wage exemption for micro, small and medium enterprises (MSME), saying it could leave 8.1 million workers without higher statutory pay.
MTUC Penang’s K. Veeriah said MSME accounted for about 48.7% of total employment in the country, involving about 8.09 million workers.
READ MORE: Proposed RM3,100 minimum wage could hurt competitiveness, SMEs: FMM
READ MORE: Minimum wage rise could leave graduates earning barely more than entry-level workers, academic warns
“With such a huge pool of workers being exempted from the minimum wage, we need to wonder if the aspiration to achieve a high-income nation status would ever be attained,” he told theSun.
He added that while the government had acknowledged the operating-cost pressures faced by MSME, it should not adopt a blanket exemption for the entire sector.
He also said the minimum wage was intended to establish a minimum floor for workers and that the government should address the concerns of businesses through targeted measures instead of exempting an entire category of employers.
“While recognising that some segments of business would be impacted by an increase in the minimum wage, the government ought to address those concerns in isolation and not adopt a blanket policy to exclude the entire MSME sector from the coverage of the national minimum wage order.”
Veeriah said the exemption could result in unequal treatment among workers, with employees in MSME potentially receiving no increase while workers outside the sector benefited from the forthcoming higher minimum wage.
“Denying close to 8.1 million workers the minimum wage is a gross injustice and morally repulsive.”
He also questioned the government’s move to prioritise the concerns of employers over low-wage workers, who were already facing rising living costs and inadequate wages.
On Sept 30, Entrepreneur Development and Cooperatives Minister Steven Sim said the government would adopt other approaches to help raise wages among MSME workers, including wage subsidy support under the Progressive Wage Policy, so that wage increases would move in tandem with productivity growth.
However, the exemption has been welcomed by business groups, with the SME Association of Malaysia (Samenta) saying it would give smaller businesses room to manage rising costs and protect jobs.
The Malaysian Employers Federation also welcomed the reprieve, saying it would give MSME more time to adjust to cost pressures while maintaining employment opportunities.
On Oct 2, Samenta and the Malaysia Retail Chain Association said a broad minimum-wage increase could trigger higher operating costs and a cascading effect on wages across salary structures.
The government has yet to announce the new minimum-wage rate or full implementation details.
The existing RM1,700 minimum wage remains in force, with details of the wage review expected to be announced when Prime Minister Datuk Seri Anwar Ibrahim tables Budget 2027 on Oct 9.
