The controversial RM1,200 minimum wage has been gazetted and
will officially encompass 56 city and municipal council
areas from Feb 1.
The gazette was released by the Human Resources Ministry on
Jan 10 under the Minimum Wages Order 2020.It states that the
minimum wage rate payable to an employee who works within
the 16 city councils and 40 municipal councils will be
RM5.77 an hour or RM1,200 monthly.The rates payable for a
four-, five- and six-workday week will be RM69.23, RM55.38
and RM46.15 respectively (see Chart 1).
The gazette states that the minimum wage rates payable for
those outside the listed areas will be RM5.29 an hour or
RM1,100 per month, with the rates payable for a four-, five-
and six-workday week being RM63.46, RM50.77 and RM42.31
respectively (see Chart 2).
It states that those who do not receive basic wages but are
paid based on piece rate, tonnage, task, trip or commission
must not be paid less than the respective stated minimum
Malaysian Employers Federation executive director Samsudin
Baradan lamented that the cost of doing business would
likely rise with employers having to bear the increase.“The
present economic situation is hardly the time to increase
the cost of doing business.
“Malaysia is affected by the sluggish global economy and
this is reflected by the high number of retrenchments,” he
He said the revision of the minimum wages bypassed the
National Wages Consultative Council, adding that the
government had not fulfilled its pledge to share 50% of the
cost increases from higher minimum wages.
With 56 places to benefit from the new directive, he said
this would cause anxiety among employers and employees as
the demarcation of geographical boundaries was unclear.“For
example, the oil palm industry will face major problems as
the estates are located within the 57 major cities and
towns, and also the other local councils.
“Such estates will be subjected to a lot of scrutiny in
terms of alleged discriminatory practices by paying
different rates of minimum wages to the employees,” he
Samsudin said since the increased minimum wage would only
benefit foreign workers, the ringgit would be weakened
He said the increased minimum wages would result in about
RM2.5bil more annual remittances to the home countries, with
foreign workers already repatriating about RM34bil yearly.
SME Association of Malaysia president Datuk Michael Kang
concurred that the cost of doing business would “definitely
“In 2019, a lot of SMEs gave their feedback that salaries
had increased by about 10% to 20% but productivity did not,”
he said, adding that any extra costs would have to be passed
down to consumers.
“I estimate that average prices will increase by about 10%
to 20%. You can already see a rise in parking fees,” he