Employers' groups state that the proposal to set a minimum wage of RM3,100 per month is inappropriate if based on the wages of employees in Government-Linked Companies (GLCs).
The Malaysian Employers Federation (MEF) and the Federation of Malaysian Manufacturers (FMM) noted that GLCs and Government-Linked Investment Companies (GLICs) operate in a different league compared to Small and Medium Enterprises (SMEs), particularly regarding profitability, productivity, and the capacity to absorb higher wage costs.
SMEs Face Higher Costs
MEF Senior Advisor Syed Hussain Syed Husman stated that the operational conditions and business models of SMEs differ vastly from those of GLCs and GLICs.
According to him, data from the Department of Statistics Malaysia shows that the monthly median wage for formal sector employees has reached RM3,027, compared to the current minimum wage of RM1,700.
He noted that raising the minimum wage from RM1,700 to RM3,100 would represent an 82.4% increase in wage costs.
Such an increase could also drive up overtime payments, statutory contributions, and the wages of experienced employees.
RM3,100 as a Living Wage
The RM3,100 figure was previously proposed by the Malaysian Trades Union Congress (MTUC) as a minimum wage rate to be implemented by Budget 2027.
Meanwhile, the government has established RM3,100 as the living wage benchmark for GLC and GLIC employees. Prime Minister Datuk Seri Anwar Ibrahim previously stated that 34 GLCs and GLICs have adopted this rate.
The RM3,100 figure is based on cost-of-living estimates by the Employees Provident Fund (EPF) and Universiti Malaya, indicating that such an income enables a family to participate in community life, support family development, and manage needs without excessive financial stress. GLC Profits Do Not Reflect the Broader Business Landscape
FMM President Jacob Lee stated that while workers certainly deserve higher wages when companies perform well, the profits of a small number of large corporations do not reflect the situation facing most businesses.
Samenta also noted that the RM3,100 rate might be too high for many SMEs, which are still grappling with rising costs for electricity, transportation, and raw materials.
Its president, William Ng, said that a sharp increase could lead some companies to cut back on hiring, lay off staff, or shut down operations.
However, employer groups agree that workers' wages need to rise, though they maintain that such increases should be implemented gradually, accompanied by government support for businesses.
