Written by Super User. Posted in Uncategorised

Restructuring of Wages

Situation 1
Company A was granted a deferment from 1 October 2013 to 31 December 2013. Can Company A restructure their employee’s wages?

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YES it can, before 1 January 2014 company A can still negotiate with its employees during this period of deferment (1 October 2013 till 31 December 2013) for allowances (if applicable) to be converted into the employees’ basic wages.

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Situation 2
Samad is 59 years old and works for Company XYZ in Ipoh, Perak on 10 September 2012. He was paid a basic wages of RM700.00, food allowance of RM80.00 and travelling allowance of RM60.00 He was hired under a fixed-term employment contract for a period of 1 year. Can Samad’s salary be restructured by converting the above-said allowances into his basic wages?

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YES. The employer may negotiate with Samad to have his salary restructured and reflect the minimum wages before the Minimum Wages Order 2012 came into force. However, in Samad’s case, the restructure is only limited to food allowance since food allowance is included in the definition of ‘wages’ under Section 2 of the Employment Act 1955. The travelling allowance cannot be converted into his basic wages since travelling allowance or the value of any travelling concession is defined as ‘non-wages’ under the same Act.

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Situation 3
Bahadur Hossein, a foreign employee, was offered to work as a production operator in a rubber factory beginning 1 November 2012. He was paid a monthly basic wages of RM500.00. In pursuance to the implementation of the minimum wages on 1 January 2013, his employer restructured his wages and was converted into RM900 monthly. Should the employer also restructure the wages of all other senior workers who have been working longer at the factory?

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NO. The Company needs to restructure only Bahadur Hossein’s salary. Nevertheless, wage restructuring for all employees is highly encouraged to ensure harmonious industrial relations at the workplace.

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Probation Period

Situation 4
Ismail Khan is a foreign employee who was hired under a fixed-term contract for a period of 3 years beginning 16 July 2013. Can he be placed under probation?

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NO. The Government’s current policy states that a probation period is not applicable to foreign employees effective 1 July 2013. Refer here.

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Work Situations

Situation 5
Ali works at a retail shop owned by his family with a basic wages of RM500.00. Is the minimum wages applicable to Ali?

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YES. Ali is entitled to minimum wages under The Minimum Wages Order if he is hired under a contract of service. Refer to Relevant Law.

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Situation 6
Kak Timah is a maid. Is she entitled to minimum wages?

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NO. The Minimum Wages Order 2012 excludes domestic servant (e.g. maid, gardener and personal driver) from the application of the minimum wages.

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Compliance

Situation 7
On 1 February 2013, TUX Ptd. Ltd. which runs its operations in Sibu, Sarawak, issued a pay slip for one of its employee which stated that his gross pay was RM800 a month (basic salary of RM600 and RM200 for other allowances). Has TUX Ptd. Ltd. complied with the Minimum Wages Order?

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NO. TUX Ptd. Ltd. has not complied with the Minimum Wages Order 2012 because the basic wages of RM600 is less than the minimum wages rate. Minimum wages is defined as basic wages whereby the basic wages for an employee in Sabah, Sarawak and Labuan shall not be less than RM800 a month.

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Changes to Collective Agreement

Situation 8
Murni Plantation Sdn Bhd manages a palm oil plantation in Kelantan with 200 employees. The Company has an “in-house union”, known as Murni Plantation Employees Union. A Collective Agreement was signed between the union and the employer on 4 July 2011 and is valid until 3 July 2014. The Collective Agreement states that each employee be paid a basic wages of RM500.00 a month. Is Murni Plantation Sdn Bhd bound to revise the Collective Agreement in order to comply with the Minimum Wages Order?

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YES. The employer needs to revise the terms agreed in the Collective Agreement to reflect the rate for basic wages which shall not be less than that stated in the Minimum Wages Order 2012. The employer may seek to apply for a variation to the Collective Agreement in the Industrial Court for this purpose.

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Situation 9
Cuci Cleaning Services Sdn. Bhd has entered into a cleaning contract with OMG Medical Centre for 2 years, from 15 January 2012 until 14 January 2014. Among the terms of contract provided includes a total of 30 local employees be paid RM600 a month. Does Cuci Cleaning Services Sdn Bhd need to revise its terms under the contract to ensure compliance with the Minimum Wages Order 2012?

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YES. Cuci Cleaning Services Sdn Bhd has to comply with the Minimum Wages Order.

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Overtime Pay Calculation

Situation 10
Muthu is a local welder in Johor Bharu who commenced work on 5 May 2013 with a basic wages of RM630 and no other allowances. He has been placed under a probation period for 3 months as per the contract of service. During this period, his employer ordered Muthu to work overtime. Does the employer need to calculate the overtime pay based on Muthu's basic wages during the probation period which is RM630 a month, or the basic wages of RM900 a month?

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The calculation of the overtime pay for Muthu has to be based on the basic wages of RM630 a month. However, if Muthu has completed his 3 months probation period, the overtime will be based on RM900

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