Minimum Wage in Malaysia - Frequently Asked Questions

Is there a separate legislation relating to minimum wages in Malaysia?

Malaysia’s minimum wages policy is decided under the National Wages Consultative Council Act 2011 (Act 732). Under this Act, a tripartite body known as the National Wages Consultative Council is formed to recommend the minimum wages rate to the Government and once approved by the Government, the Minister of Human Resources will make a Minimum Wages Order. [Ref:Minimum Wage Portal - http://minimumwages.mohr.gov.my/news-publications/law/]

Do one or more minimum wages exist that is/are determined by law?

More than one minimum wage exists in Malaysia.

At what level are minimum wages determined?

Minimum wages are determined at regional level. Malaysia comprises of two parts, West and East Malaysia. For West Malaysia, the minimum wage is RM 900 and for east Malaysia, it is RM 800.

On what basis is minimum wage calculated?

Minimum Wage is calculated on hourly and monthly basis according to the Minimum Wages Order 2012.

In case of weekly/monthly minimum wage, are they based on any fixed number of hours?

It is not stated under the law specifically but the Guidelines for the Minimum Wages Order 2012 calculated the minimum wages rate based on calculations of total working hours of a maximum of 48 hours a week.

Are governmental bodies, employer and/or trade union representatives involved in minimum wages setting?

The Minister of Human Resources will make a Minimum Wages Order based on the recommendation of minimum wages rate provided by the National Wages Consultative Council. This council recommends minimum wages policy after carrying out research and would be approved by the Minister of Human Resource. The Council known as the National Wages Consultative Council (NWCC) is formed to recommend the minimum wages. The council which has been introduced under Act 732 in the year 2011 is a tripartite council consisting of representatives of employees, employers, government and other independent experts.

How are upratings (adjustments) of minimum wage/s decided upon?

The NWCC undertakes research on minimum wages and make a recommendation to the Minister of Human Resources. The Adjustments later would be approve by the Minister to enforce it.

Which are the components of minimum wage in Malaysia?

Only fixed component of minimum wage exists in Malaysia.

How frequently is the fixed component of minimum wage updated?

Minimum wage is updated once in two years.

What is/are the yardstick/s on which minimum wage upratings are based?

Minimum wage upratings are based on median wages, poverty line income, unemployment rate, and consumer price index.

What is the national poverty line? (In national currency)

The national poverty line is RM 35.29/daily(2012) RM 763/month. However, there is no official updates by the government.

How often is poverty line updated?

Poverty line is updated at irregular time lags.

When was poverty line last updated? (Specify YYYY/MM)

Poverty line was last updated in 2012.

How is minimum wages compliance regulated?

Minimum wage compliance is regulated by Labour Manpower office.

Which legal sanctions can be applied in compliance is lacking?

Penalties for non-compliance are given in the table below: • First Offence - Fine of not more than RM10,000 per employee. The court can order the employer to pay each employee the difference between minimum wages rate and the employees’s basic wages. • General Penalty- Fine of not more than RM10,000 for each offence where no penalty is provided. • Penalty for Continued Offence - A daily fine of not more than RM1,000 for continuous offence after conviction. • Penalty for Repeated Offence- A fine of not more than RM20,000 or imprisonment not exceeding 5 years.

Are sanctions often being applied?

There is no specific data but based on the news, there are sanctions being applied to non-compliances.

Are employer and/or trade union representatives involved in compliance procedures?

Employer/trade union representatives are not involved in compliance procedures.

To whom/Where can individuals complain, if they think they are earning less than minimum wage?

In case of non compliance, individuals can complain to Secretariat National Wages Consultative Council Ministry of Human Resources.

Which month of the year is minimum wage rate revised in Malaysia?

Minimum Wage is revised once in two years.