Key Information for Employers
Minimum Wages for Foreign Employees
Some large companies and SMEs including micro-enterprises have been given deferments in respect of paying minimum wages to their foreign employees. The companies are listed in the following orders:
As part of the policy, employers who implement minimum wages are allowed to deduct the annual levy on a prorated monthly basis and costs of accommodation not exceeding RM50 per month from their foreign employees’ monthly wages. Employers have to notify the nearest Labour Office via email or post regarding these two deductions. Deduction for the cost of accommodation exceeding RM50 a month requires approval from the nearest Labour Office.
Domestic servant 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 not covered under the Minimum Wages Order 2012.
Information on Restructuring of Wages
Employers have been given the opportunity to restructure employee’s wages before the date of implementation of the Minimum Wages Order 2012 which was 1 January 2013 (for employers with more than 5 employees) and 1 July 2013 (for employers with 5 employees or less).
However, certain organisations that have been given deferment can still restructure employee’s wages until the specified commencement date as stated in the Minimum Wages (Amendment) Order 2013, Minimum Wages (Amendment) (No.2) Order 2013 and Minimum Wages (Amendment) (No.3) Order 2013. The Guidelines On The Implementation Of The Minimum Wages Order 2012 contains further information on restructuring of wages.
Ah Seng is an employee in a Kuala Lumpur manufacturing factory. He is being paid RM700 in basic wages and receives RM250 in allowances. Prior to the enforcement of the Minimum Wages Order 2012, his employer, with Ah Seng’s consent, restructures his wages so that he now receives RM900 in basic wages and RM50 in allowances. His monthly wages remain the same, i.e., RM900 + RM50 = RM700 + RM250.
It is important to note that wages restructuring can only be done after negotiation with the employees/ trade union. The Guidelines On The Implementation Of The Minimum Wages Order 2012 contains more comprehensive information on restructuring of wages.