PUTRAJAYA (Oct 16): The new minimum wage rule for larger firms will be assessed at the group level and not individual subsidiaries, Human Resources Minister Datuk Seri R Ramanan said.
“If there is a subsidiary, the subsidiary belongs to the holding company or the mother company,” he said at a press conference on Friday. “Therefore, the turnover will be taken in totality, not just in an individual capacity.”
For employers exempted, however, the minimum wage remains at RM1,700 per month, Ramanan said.
Prime Minister Datuk Seri Anwar Ibrahim announced that the monthly minimum wage would rise by RM300 to RM2,000 effective June 2027. The new minimum wage will cover over four million workers in Malaysia, according to the government’s estimates.
Micro, small and medium enterprises with annual sales below RM50 million will be exempted to allow them time to adjust.
The new rate had been carefully considered against employers’ capacity, potential inflationary pressures, and consequences for the economy, Ramanan said. “If we choke every part of the industry, then definitely inflation will go up. So we have to slowly, systematically do it.”
Smaller businesses, meanwhile, must be given some room to adjust gradually to the wage reforms, he said.
The new rate will also cover foreign workers employed by firms subject to the increase, Ramanan said, citing International Labour Organization standards.
Foreign-worker coverage is already part of Malaysia’s minimum wage framework.
While the government acknowledged dissatisfaction from some companies, the decision followed an assessment of data gathered from ministries, industries and employers, he said.
“This is carefully thought of, it is carefully planned, it is to make sure the economy can sustain this salary increase,” he added.