Written by Super User. Posted in employees

Malay female working on laptop As an employee working in Malaysia, you are entitled to receive minimum basic wages of RM900 in Peninsular Malaysia and RM800 in Sabah, Sarawak and Labuan. With the implementation of the Minimum Wages Order 2012 your employer is required by law to ensure that all employees meet the minimum wages rate. While some items can be counted towards the minimum wages calculation, you should be aware of your rights in your negotiations with your employer. For more information as to what can and cannot be factored into your minimum wages, please follow this link.

Scenarios

Ali works for a Sabah SME in the manufacturing industry. He was hired on 5th January 2012 at a basic wage of RM600 with an additional RM200 in the form of allowances. Prior to the 1st January 2013 implementation of the Minimum Wages Order 2012, his employer held a meeting with him to restructure his wages by absorbing all his allowances (RM200) to form a new basic wages of RM800, which is the minimum wages threshold for Sabah.
 
Ah Seng works for a Kuala Lumpur SME in the service industry. He was hired on a daily basis, earning RM20 per day for six days a week. With this wage and work schedule, Ah Seng makes RM20 x 26 = RM520 per month. This is RM380 less than the minimum wages set for Peninsular Malaysia, and his employer will have to raise his daily rate by RM14.62. His new daily wage is RM34.62 or RM900.12 per month.
 
Ravi, a Malaysian was just hired by a Selangor manufacturing company, and has been put on probation for six months. Based on the Minimum Wages Order 2012, his wages for the first six months cannot be less than 70% of the minimum wages rate. In other words, he must be paid a minimum of RM630 for the first six months. Once his probation period of six months is over, his wages will rise to RM900 per month.
After the end of the probation period, his employer decides that Ravi needs more training, and his probation period is extended by another three months. However, reduced minimum wages apply only to the first six months of probation, and the employer must now raise Ravi’s basic wages to RM900 even though he is still on probation.
 
Salmah has been working for a Kuching manufacturer for the past three years. She was earning RM700 in basic wages as well as RM50 for her monthly housing allowance, bringing her total monthly income to RM750. Since the enforcement of the Minimum Wages Order 2012, her employer has restructured her wages adding an additional RM50 to bring the basic wages to RM800. The employer restructured her housing allowance to make it a part of her basic wages, and topped up the difference.
The employer initially wanted to include the company’s EPF contributions as part of the minimum wages calculation but Salmah correctly told him that he was not allowed to do that. In fact, employers are not allowed to include the following items as part of the minimum wages calculation:
  • Housing accommodation including supply of provisions
  • Contributions by the employer to any superannuation scheme
  • Travelling allowance or concession
  • Sum payable to the employee to defray special expenses, e.g., claims
  • Gratuity payable on discharge or retirement
  • Annual bonus or any part thereof
 
For more information, please see the section Information on Restructuring Employee Wages.

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