According to Social Protection Contributors Advisory Association Malaysia (SPCAAM) President J Solomon, the answer is an unequivocal yes.
His reasons?
J Solomon cited “Belanjawanku”, a study by EPF, which revealed that people in the Klang Valley spend close to an entire month’s salary on annual social and festive activities.
He also cited Indonesia as a country that mandates a month’s salary as festival aid to all employees.
“This practice has been especially beneficial to low-income workers, ensuring that the spirit of the festivities remains undiminished by financial concerns.
“Many companies that operate here also operate in Indonesia, including government-linked companies (GLCs), and are paying one month’s salary to workers in Indonesia (for this purpose),” he said in a statement.
Domestically, Solomon also cited the Selangor government as providing a month’s salary as festival aid to its employees to address the rising cost of living, especially for those who fall within the B40 and M40 income groups.
He also stated that after sustained advocacy by the National Union of Bank Employees (NUBE), banks also provided similar aid to their employees in 2023.
“However, this year’s retraction of this support by the banks, despite prior agreements, is both surprising and disconcerting.
“This is especially true when many of these companies, including GLCs, enjoy substantial profits, a portion of which could be shared as festival aid,” he said.
Business groups however, are objecting to the proposal to make a one-month bonus as festival aid mandatory for workers, warning that such a move would place a significant financial burden on employers.
Speaking on behalf of business groups, the Malaysian Employers Federation president Syed Hussain Syed Husman said such a decision would cause a huge burden for businesses that are yet to recover from the Covid-19 pandemic.
Businesses today are merely surviving,” he said.
“Micro, small and medium-sized enterprises account for 95% of all businesses (in Malaysia), and they need time to rebuild their cash flow and resources.
“People who make these suggestions must understand that businesses are not banks,” he was quoted as saying, perhaps as a repartee against SPCAAM President J Solomon, who is also in the midst of advocating for the banks to pay a one month bonus of Festival Aid for the B40 and M40 workers in the banks, via his capacity as the general secretary of the National Union of Bank Employees (NUBE).
Small and Medium Enterprises Association of Malaysia president William Ng also echoed Syed Hussain’s objection, by saying that the proposal would put a financial strain on businesses, especially as they had seen reduced profit margins since the pandemic.
“Most businesses are operating with margins lower than before the pandemic,” he said.
“As such, wages, being the main cost component, have to be budgeted carefully against business performance.
“If we are to entertain this suggestion, it will impact real salary growth for deserving Malaysians.”
Nehru Sathiamoorthy is the author of “While Waiting for the World to end”. He was a columnist at FMT and a frequent contributor to the South China Morning Post, The Star, Malaysia-Today, MalaysiaNow, MalaysiaKini and Focus Malaysia.
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