KUALA LUMPUR (Oct 18): The country’s monthly minimum wage will be raised to RM1,700 from RM1,500, effective from Feb 1 next year, announced Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim in his Budget 2025 speech.

However, the government will put a temporary postponement of the minimum wage requirement for small businesses for those with less than five employees until Aug 1, 2025, Anwar said on Friday.

The Ministry of Human Resources will provide the minimum wage guidelines for all employment sectors for workers’ reference, according to Anwar. “For example, the starting salary for an industrial and production technician is RM2,290, a mechanical engineer is RM3,380, and a creative content design professional is RM2,985.”

He said that the Progressive Wage Policy (PWC), which began as a pilot project in June this year, is part of the government's initiative to reform the labour market to increase workers' incomes.

“To support the implementation of the PWC, the government has allocated RM200 million, benefitting an estimated 50,000 workers,” he noted.

The government will also allocate RM250 million to increase the participation of more impoverished citizens under the People's Income Initiative (IPR) to boost their income.

To recap, the government in February 2023 launched the IPR, with the aim to increase the income of the hardcore poor and the bottom 40% income group (B40) to at least RM2,000 a month.

The IPR initiative involves three main categories — Intan, Insan and Ikhsan — aimed at overcoming the people’s daily economic problems like shortages of agriculture products, high prices of ready-to-eat foodstuff, and difficulties securing workers for certain sectors.

Human Resources Minister Steven Sim Chee Keong said the minimum wage should not be regarded as the starting salary, especially for graduates and skilled workers.

“The decided minimum wage rate is aligned with the government's efforts to ensure the welfare of workers, especially low-income workers, while uplifting dignity and prioritising the people,” Sim said in a statement.

He said his ministry will be publishing the starting salary guidelines for all employment sectors based on the Malaysia Standard Classification of Occupations (Masco) for the first time.

“These guidelines will serve as a reference for workers and employers in determining the appropriate starting salary rates for specific jobs,” he said.

Effective from Sept 15, the ministry has enforced new amendments to the laws related to trade unions, reducing government constraints on the establishment of trade unions to empower workers' rights to demand compensation and better working conditions, including higher wages.

Additionally, the ministry will also implement various upskilling training initiatives for workers as part of efforts to ensure wage rates rise in accordance with workers' skills and performance.

Click here for all you need to know about Malaysia's Budget 2025.