Malaysia to start RM1,500 minimum wage from May 1; firms with fewer than five staff to follow in Jan 2023
Malaysia’s new minimum wage rate of RM1,500 has been officially gazetted and will take effect nationwide this Sunday. The exception is for employers with fewer than five staff members which will only be legally required to start paying at least RM1,500 from January next year.
The Minimum Wages Order 2022 made by Human Resources Minister Datuk Seri M. Saravanan was published in a federal government gazette yesterday. This means that the minimum wage that employers must pay workers would amount to RM7.21 an hour. In daily wages, this translates to RM57.69 for a six-day work week; RM69.23 (five-day work week); and RM86.54 (four-day work week). For employees who are not paid basic wages but are paid wages based only on “piece rate, tonnage, task, trip or commission”, the rate of monthly wages that has to be paid to such employees from May 1 is at least RM1,500.
The new RM1,500 minimum wage rate will apply to an employer who has five or more employees from May 1. If an employer carries out a professional activity classified under the Malaysia Standard Classification of Occupations (Masco) as published officially by the Human Resources Ministry, the new RM1,500 rate will apply from May 1, regardless of how many employees are employed by such an employer. In other words, even if an employer who carries out such professional activities has less than five employees, such employees would have to be paid at least RM1,500 from May 1.
But if you are an employer who has fewer than five employees, your employee will only be entitled to the new RM1,500 minimum wage rate from January 1, 2023. This would be eight months from the May 1 rate for other employers. This deferred introduction of the new minimum wage rate also applies to employees who take in commission-based wages from such employers with less than five employees.
Before the new RM1,500 minimum wage rate kicks in for these employers with a workforce of below five, these employers will continue to be required to pay at least RM1,200 or RM1,100 depending on where their place of employment is located. From May 1 to December 31, the minimum monthly wage for employees (whose employers have less than five employees) in areas under city councils or municipal councils will continue to be RM1,200, which translates to RM5.77 per hour.
In terms of daily wages, this would translate to RM46.15 for a six-day work week, RM55.38 for a five-day work week, or RM69.23 for a four-day work week. From May 1 to December 31, the minimum monthly wage for employees (whose employers have less than five employees) in areas that are not city councils or municipal councils will continue to be RM1,100, which translates to RM5.29 per hour. In terms of daily wages, this would be RM42.31 for a six-day work week, RM50.77 for a five-day work week, or RM63.47 for a four-day work week.