Minimum Wages Policy has raised the basic wages of all employees to a minimum of RM900 in Peninsular Malaysia and RM800 in Sabah, Sarawak and Labuan respectively. This means that as an employee in Malaysia, you have the right to expect minimum basic wages. The Minimum Wages Order 2012 commenced on 1 January 2013 for employers with more than five employees, and on 1 July 2013 for employers with five or fewer employees. Meanwhile, SMEs will pay their foreign employees minimum wages beginning 1 January 2014. Deferments have been given to members of specific organisations and individual companies as stipulated by the Minimum Wages (Amendment) Order 2012, Minimum Wages (Amendment) Order 2013, Minimum Wages (Amendment) (No.2) Order 2013 and Minimum Wages (Amendment) (No.3) Order 2013. The Minimum Wages Order 2012 does not apply to apprentices nor to domestic servants (e.g., maids, gardeners and personal drivers) 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].
Know your rights!
- What kind of payments count towards minimum wages?
- How can I negotiate my salary with my employer?
- What if I’m on probation or if I am a part-time worker?
Additional Information for Employees
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The Minimum Wages Order 2012 was implemented to ensure that all employees in Malaysia earn more than the country’s Poverty Line Income (PLI), which in 2009 stood at RM800. In a study conducted in 2009 showed that more than 33.8 % of workers in the private sector earned less than the PLI.
The Minimum Wages Order was formulated to ensure that all employees benefit from the fruits of development as the country continues to transform itself into a high-income nation by 2020. The establishment of minimum wages will also create greater job opportunities for Malaysian employees.
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- is there anybody exempted from paying minimum wages...
True. This Minimum Wages Order 2012 shall not apply to domestic servants (eg. maid, gardener and personal driver) 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]. The Order also does not apply to apprentices.
- that it’s okay for him to pay me less than minimum wages if I consent to it…
False! Your employer is required by law to pay you minimum wages. Even if you agree to it, he is punishable as per the stipulations of the law if he pays you less.
- that the allowance I received previously can be restructured as part of my basic wages to meet the minimum wages threshold…
True! Your employer can restructure wages to include allowances as part of employees’ minimum wages but only if the negotiations are done before the commencement of the Minimum Wages Order for your employer and with employees’ consent. However, not all payments are considered wages under the legislation. For more information on restructuring your wages, please follow this link.
- that I may be paid lesser than the minimum wages rate as I am a probationer and I am local employee…
True! Because under the specific formula for calculating your wages it cannot be lower than 30% of the minimum wages level of RM900 in Peninsular Malaysia or RM800 in Sabah, Sarawak and Federal Territory of Labuan. In other words, it cannot be lower than RM630 for Peninsular Malaysia and it cannot be lower than RM560 for Sabah, Sarawak and Labuan. Furthermore, it only applies for the first six months of your probation period and cannot be extended even if your probationary period is extended. In other words, if you are on probation for a year, you will receive a reduced pay for the first six months only. For the rest of the year you will see your salary increase to the minimum wages level or higher.
- that he can now use the Minimum Wages Order 2012 to pay me less than what I agreed to…
False! The Minimum Wages Order clearly states that your employer cannot use the Order as an excuse to pay you less than the wages agreed upon in the contract of service.