KUCHING: The Malaysian Employers Federation (MEF) has advised companies to budget carefully in preparation for the new national minimum wage of RM1,700, effective next year.
MEF president Datuk Dr Syed Hussain Syed Husman said that employers need to ensure that the increase in minimum wages to RM 1,700 with effect from Feb 1, 2025 be provided for in their 2025 budgets and operational costs.
“It is critical for employers to plan ahead to avoid cash flow challenges. Employers need to review their salary structures and ensure that employees earning less than RM1,700 are adjusted to RM1,700 for employers with five employees and more and Aug 1, 2025 for employers with fewer than five employees.
“Early preparation will ensure better compliance with the new minimum wages order thus avoiding penalties due to non-compliance,” he said in a statement.
Syed Hussain further said vendors to the main companies experienced challenges to meet the new minimum wages rate of RM1,700 as their contracts run beyond 2025 and their contracts continue to run, some up 2027 and beyond.
“The rates were determined based on the minimum wages at the material time when their contracts were agreed i.e. RM1,500 minimum wage per month.
“With the new minimum wages as announced by the Prime Minister, all lowest pay must move to RM1,700 with employers having less than five employees given a six months grace period to Aug 1, 2025.
“Many vendors are having issues as they will find it hard to amend their contracts and get their rates reviewed based on RM1,700 per month minimum wages,” he said.
He also urged all multinational corporations (MNCs), government-linked companies (GLCs) and large companies to amend their contracts with vendors or have a separate agreement in running contracts to make the necessary changes to the rates taking into account the new minimum wages of RM1,700 per month.
“Such review in the rates of payment taking into account the new minimum wages will enable the vendors to fulfill their obligations to implement the new minimum wages.
“As responsible members of society, we all must cooperate to honour the new minimum wages,” he said.
He added all must do their level best to meet the needs of all and ensure all policies are implemented with a heart.
“We must treat all people humanely and understand their challenges and issues. The principles of respect, caring and understanding are all well documented in the Malaysia Madani framework,” he said.
The minimum wage increase, he said, reflects the government’s efforts to ensure equitable compensation across all sectors.
“Employers, especially vendors to the main companies, must be empowered to comply with the new minimum wages,” he said.
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