by Dr Hiew King Cheu

Many are puzzled and unhappy with the result of the just implemented Minimum Wages Act in Malaysia where general workers must be paid a minimum wage of RM900 in Peninsular Malaysia and RM800 in Sabah.

The employers and the employees are facing many problems and the implications are building up. Information and feed back from the ground shows that many people are affected by this new guideline!

According to the people who have made comments to me, many workers were asked to leave their jobs due to the fact that their employers couldn’t afford to pay higher wages anymore. This is due to the constraints of their operating overheads and the prevailing business atmosphere which is affected by the current slowdown of the economy.

We would like to see a win-win situation whereby both the employers and employees benefit and not being affected negatively. Any one side that is affected negatively is not a good thing.

This can only be done by improving the economic situation in Sabah and in Malaysia as a whole, whereby the employers are able to gain reasonable profits sustainably to provide higher wages to the workers.

Improve the economy first

Therefore, to implement this Minimum Wages Act, the government must first of all improve the economic situation in the country. For example, Indonesia is currently having a vibrant economy, and now they can afford to implement minimum wages for workers.

Many employers had negotiated and resorted to change the method to pay their workers by switching to “daily pay” to avoid being penalized by the particular Minimum Wages Act, but most of them did not know the government had already moved a step ahead of them.

There is a new ruling and guideline set by the Ministry of Human Resources and the National Wages Consultative Council called the “Guidelines on the Implementation of the Minimum Wages Act 2012” published on the 6th of September, 2012 which specifically mentioned the issue on ‘Daily Rated Employees’.

The daily minimum wages rates for Sabah, Sarawak and Federal Territory of Labuan are represented in the table on the left.
(The calculations are based on total working hours of a maximum of 48 hours a week)

This is really unworkable because the daily paid workers will definitely choose to work for 4 days only as it is the same pay with less days of work. We don’t see the logic behind this formulation, and surely the employers will suffer more deeply.

This has to be reviewed immediately and we cannot do such things according to mere arithmetic calculation of figures. The employment policies are not game plays, they can affect the people badly. The consultative council must revise the guidelines to be more practical so as not to create more confusion and inconveniences to the employers and employees.