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PUTRAJAYA (April 30, 2012): A minimum wage of RM900 a month has been set for private sector workers in Peninsular Malaysia while their counterparts in Sabah and Sarawak will take home RM800 a month.

This works out to RM4.33 per hour for those in the Peninsular while employees in Sarawak, Sabah and Federal Territory of Labuan are to be paid a minimum of RM3.85 per hour.

The amount is applicable to all sectors except for workers in the domestic sector such as maids and gardeners.

In making the much-awaited minimum wage announcement at a pre-Workers Day event in Dewan Perdana of the Putrajaya International Convention Centre (PICC) today, Prime Minister Datuk Seri Najib Abdul Razak said that the government has also set in motion mechanisms to ensure that the implementation of this will not burden employers, and at the same time not cause employees to incur losses by allowing the absorption of allowances or fixed cash payment in the calculation of minimum wage.

“This is a special gift from the government to all workers in Malaysia,” said Prime Minister Datuk Seri Najib Abdul Razak in making the much awaited minimum wage announcement at a pre-Workers' Day event in Dewan Perdana of the Putrajaya International Convention Centre (PICC) today.

He said that the government has also put in place mechanisms to ensure that the implementation of minimum wage will not burden employers, and at the same time not incur losses for employees by allowing the absorption of allowances or fixed cash payment in the calculation of minimum wage.

He said the implementation for this minimum wage is six months from the day the Minimum Wage Order is gazetted.

“However to give room and opportunities for micro enterprises to be fully prepare and not jeopardise their businesses, the implementation of the minimum wage will be 12 months from the day the Minimum Wage Order is gazetted,” said Najib.

He explained that the 12 months exemption however does not cover professional firms such as medical and dental clinics; law; architecture; consultation firms and etc, although they have less than five workers.

“They will have to comply with the minimum wage requirement in six months time,” he said.

Najib assured workers that the minimum wages will not be stagnant and it will be reviewed from time to time in line with the capability, productivity and competitiveness in the country.

Najib who is also the Finance Minister said that the government will also have a flexible implementation mechanism to ensure employers who are truly unable to execute the minimum wage requirement to apply for an extension.

He added that while the government is aware that employees had demanded a minimum wage of between RM1,200 and RM1,500, it could not be implemented.

“Upon the recommendation of the National Wage Consultative Council and based on the World Bank study, the minimum wage could not be set too high.

“If it is set beyond the RM900 (basic salary) level, it would affect the economy, labour market and the entry foreign workers.

“Should this happen, industries could not operate accordingly and many would lose their jobs and the government cannot afford to allow this to happen as it would affect employees welfare and national interest,” he said.

Meanwhile Human Resources Minister Datuk Dr S. Subramaniam in his speech earlier said that a Minimum Wage Implementation Committee (Jawatankuasa Pelaksanaan Gaji Minimum) will be formed to discuss and find the best mechanisms for the payout to certain sub-sectors such as lorry drivers, those in the textile industry and car salesmen, among others.

He explained that the wage structure for these sectors are based on commission and output, thus it is difficult to set a minimum wage according to the basic salary.

The minimum wage for the private sector issue has been researched by the Human Resources Ministry’s technical committee comprising economic, statistics, and social science experts.

The result of their research was then discussed in the National Wage Consultative Council (NWCC), which was set up specially to come up with the minimum wage recommendation.

The council is made up of 25 members – six workers' representatives, six employers' representatives, five government representatives, five independent representatives, a chairman, a deputy chairman and a secretary from the ministry.

The announcement made by Najib is the result of discussions between the employers and the employees' representatives in the NWCC.

The announcement was originally slated for March after the minimum wage bill was tabled and passed by Parliament in July last year.

However, Najib postponed the announcement after employers and workers could not come to an agreement over whether allowances and other benefits could be included as part of the base wage.