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MPs voice support, concerns over minimum wage increase

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Minimum Wage Hike: MPs Debate Pros and Cons

The Malaysian government’s decision to raise the minimum wage from RM1,500 to RM1,700 was the focus of a heated debate among government and opposition Members of Parliament (MPs) in the Dewan Rakyat today.

Support for the Move

Most MPs supported the decision, citing the benefits it would bring to workers. However, some expressed concerns about the potential burden on employers and the risk of a ripple effect on the cost of living, including higher prices for goods and services.

Employer Concerns

Teresa Kok Suh Sim (PH-Seputeh) backed the decision, but emphasized the need for the government to consider the challenges faced by employers who must bear the wage increase while also contributing to the Employees Provident Fund (EPF) for foreign workers. She proposed that employers contribute 1.5% to the EPF for their foreign workers while the workers themselves contribute 10%.

Efforts to Curb Labour Exploitation

Kok also emphasized that EPF contributions for foreign workers could prevent them from running away and curb syndicates exploiting foreign labour while also helping workers build up their savings. She added that under the current EPF system, employers pay 13% and employees contribute 11%, which could place an extra burden on employers who already bear other costs like accommodation.

Call for Price Control

Tan Sri Muhyiddin Yassin (PN-Pagoh) welcomed the wage hike, but stressed that it must be accompanied by clear price control policies and strengthened enforcement under the Price Control and Anti-Profiteering Act 2011 to ensure strict action against unjustified price hikes. He urged the government to exercise caution in implementing policies that could trigger a chain reaction on price increases for goods and services.

Concerns about SMEs

Datuk Wan Saifulruddin Wan Jan (PN-Tasek Gelugor) described the wage hike as timely, but expressed concerns about the impact on small and medium enterprises (SMEs). He called for a slight delay in implementation to ensure that all stakeholders are fully prepared and able to adapt to the effects of the wage increase.

Conclusion

The debate on the Supply Bill 2025 highlighted the pros and cons of the minimum wage hike. While some MPs praised the move, others raised concerns about the potential burden on employers and the risk of a ripple effect on the cost of living. The Dewan Rakyat sitting will continue tomorrow.

FAQs

  • What is the new minimum wage, and when will it take effect?
    The new minimum wage will be RM1,700, taking effect on February 1, 2025, for most employers. For small businesses with five or fewer employees, the new wage will take effect on August 1, 2025.
  • How will the EPF system be affected by the wage hike?
    Teresa Kok Suh Sim proposed that employers contribute 1.5% to the EPF for foreign workers while the workers themselves contribute 10%.
  • How does the wage hike impact SMEs?
    Datuk Wan Saifulruddin Wan Jan expressed concerns about the impact on SMEs, calling for a slight delay in implementation to ensure a smooth transition.
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