What Employers Need To Know

  

The Minimum Wages Order 2016 requires all employers to take necessary actions to pay minimum wages as prescribed in the Order. Employers need to know that the implementation of the Order is for the best interest of stakeholders and is in tandem with the Government’s initiative to increase productivity and the level of national income.

This website aims to provide a detailed and comprehensive information to facilitate employers to comply with the new policy. Your questions will be answered in this section or in our searchable FAQ. You may also contact us and a Ministry official will respond to your query.

 


YES. The law requires you to pay minimum wages of RM1000 per month if your company operates in Peninsular Malaysia and RM920 per month if in Sabah, Sarawak or Federal Territory of Labuan.
 
As an employer, your company is required to do the following:

• Pay all employees at least RM1000 or RM920 per month as basic wages depending on your location of operation whether in Peninsular Malaysia, Sabah, Sarawak or Federal Territory of Labuan.
• Not to reduce minimum wages to employees under probation period.
 
NO. No exemption is given under the Minimum Wages Order 2016.  
 
The Order applies to all private sector employees including foreign employees in Malaysia. However, domestic servants including maids as defined under Section 2 of the Employment Act 1955 [Act 265], section 2 of the Sabah Labour Ordinance [Cap. 67] and Section 2 of the Sarawak Labour Ordinance [Cap. 76] are exempted.
 
The National Wages Consultative Council has taken into consideration several factors in setting minimum wages i.e. the level of the Poverty Line Income, employer’s ability to pay (median wages), the Consumer Price Index, the Real Unemployment Rate and Productivity Growth.
The above factors explain the difference in the minimum wages rates for Peninsular Malaysia and for Sabah, Sarawak and Federal Territory of Labuan. For more information on how the minimum wages is determined, please click here.
 
Penalty for non-compliance of the Minimum Wages Order 2016 are as follows:
 
OFFENCE  PENALTY
First Offence Fine of not more than RM10,000 per employee. The court can order the employer to pay each employee the difference between minimum wages rate and the employees' basic wages.
General Penalty Fine of not more than RM10,000 for each offence where no penalty is provided.
Penalty for Continuing Offence A daily fine of not more than RM1,000 for continuing offence after conviction.
Penalty for Repeated Offence A fine of not more than RM20,000 or imprisonment not exceeding 5 years.
Compound A compound of not more than 50% of the maximum amount for each offence can be imposed on the employer.

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