The Progressive Wage Policy is expected to benefit 1.05 million workers with an estimated government incentive of RM2.2 billion.
The White Paper presented by the Minister of Economy, Rafizi Ramli in the National Assembly earlier today contains three main features which are implemented voluntarily, based on incentives and allocations injected by the government as well as the responsibility of employees in increasing productivity.
In his speech, it was mentioned that the Progressive Wage Policy was introduced to reform the wage structure of Malaysian workers and as a complement to the existing policy which is the Minimum Wage Policy and the Productivity Linked Wage System (PLWS).
He also said that the implementation of the policy should increase progressive wages in line with employee productivity. Indirectly, this will benefit employers and employees by obtaining the benefits of increased productivity, employee loyalty and company competitiveness.
The government's main intention is to create a more dynamic talent market which is to ensure that employers offer wages based on progressive wage setting by sector to attract the talent needed in their business.
Based on this initiative, Rafizi also expects that there will be an addition to the Employees' Provident Fund (EPF) contribution of RM 790 million and income tax revenue of RM 1.8 billion in the year implemented.
An increase in wages will increase the purchasing power of society and will increase the multiplier effect on private consumption and investment.
