Malaysia Will Have A New Minimum Wage Next Year

The review to increase the wages will take into consideration the rising cost of living in the country.

Cover image via Straits Times

The Ministry of Human Resources will be increasing the minimum wage levels in Malaysia next year

Image for illustration purposes only.

Image via Malay Mail Online

In a report by Bernama yesterday, 12 October, Human Resources Minister Datuk Seri Richard Riot Jaem, informed that the National Wages Consultative Council is currently working on reviewing the Minimum Wages Order 2016, to set the new rates for Peninsular Malaysia, Sabah, Sarawak, and Labuan.

"We know that the minimum wages order must be reviewed at least once in two years. The review will look at the ability of the employer to pay the minimum wage which is a responsibility that is very challenging to ensure that the minimum wage policy meets all objectives," said Riot, as reported by Bernama.

Riot said that with the increase of the minimum wage, the government hopes to bridge the income gap between Peninsular Malaysian and East Malaysia

Human Resources Minister Datuk Seri Richard Riot Jaem

Image via Mohd Azren Jamaludin/New Straits Times

"The main reason for the income gap is the median wage, which is the difference in employers' capability and capacity in both parts of the country, to pay wages to their employees and that's why the minimum income is lower in East Malaysia," he explained.

This latest review will take into consideration the cost of living, operation costs that has to be borne by employers, and the plea of people living and working in Sabah, Sarawak, and Labuan to increase minimum wage and help them better deal with the rising cost of living there.

The minimum wage in Peninsular Malaysia was previously set at RM900 and as for Sabah, Sarawak, and Labuan, it used to be RM800

In 2016, the minimum wage was revised and raised to RM1,000 in Peninsular Malaysia and RM920 in Sabah, Sarawak, and Labuan.

"One day, the salary in both categories will be on a par (with each other). This is still being studied by the Minimum Wage Technical Committee and the council before it is tabled to the Cabinet," added Riot.

The national Poverty Line Income (PLI) in Malaysia is currently at RM950 per month and here's how poverty is measured in the country:

A December 2014 photo from Bernama shows a group of Orang Asli children eating food that were delivered by a helicopter to an area near their village in Gua Musang.

Image via Bernama

There are two categories of poverty in Malaysia, namely;

1. Extreme Poverty: Any household that fails to fulfill basic needs such as food, clothing, shelter, and earn an average monthly incomes of less than RM460 in Peninsular Malaysia, less than RM630 in Sabah and less than RM910 in Sarawak is considered poor.

2. Poor: The households that fall under this category are most often the ones that can afford the most basic necessities food, shelter, and clothing but are unable to afford healthcare and education. Households with average monthly incomes of less than RM760 in Peninsular Malaysia, less than RM1,050 in Sabah, and less than RM910 in Sarawak are defined as poor.

What do you think about the current minimum wage in Malaysia? Let us know in the comment section below.

Speaking of employees and wages, here are all the rights you're entitled to as an employee in Malaysia:

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