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FMM asks govt to reconsider minimum wage implementation

FMM In The News: THE MALAYSIAN RESERVE, Sunday, March 20, 2022 - THE Federation of Malaysian Manufacturers (FMM) is appealing to the government to reconsider the decision to immediately increase the minimum wages to RM1,500 in May 2022 and instead take on the progressive increment approach as it has previously suggested.

“We strongly feel that a more gradual increase in  the wage rate would still be able to address the increase in the cost of living which is a result of the pandemic and the supply disruptions that have ensued,” FMM president Tan Sri Soh Thian Lau said in a statement today.

It had proposed to the Government for the minimum wages adjustment to be implemented gradually with a RM100 increase in the third quarter of 2022 and a subsequent adjustment in 2023/2024 to reachRM1,500.

“FMM strongly believes that with the necessary controls on cost increases in place by the Government as well as concerted efforts by the industry to defray cost increases internally, employers can continue to maintain employment and wage adjustments,” Soh added.

Prime Minister Datuk Seri Ismail Sabri Yaakob announced yesterday that the government has agreed to increase the minimum wage to RM1,500 starting May 1 this year.

FMM however said that based on the findings of the recent FMM-MIER Business Conditions Survey 2H2021 which was conducted from January 5 – February 10, 2022, majority of the survey respondents opined that RM100 increase in the minimum wages is an acceptable rate in this current review given the current economic conditions.

“While we note that the micro enterprises that make up 78.6% of the 97.4% of the micro small and medium enterprises (MSMEs) establishments in the country would be exempted from
this new minimum wage, the small and medium enterprises with employees up to 200 are not spared and such a steep increase would have an undesirable impact on their business recovery,” Soh said further.

“Within FMM’s own membership, only less than 2% of our membership would be exempted thus impacting the majority of our members. Furthermore, given that foreign workers would also enjoy the increase in wages, it would lead to an additional outflow of close to RM2 billion annually (based on 1.6 million legal foreign workers) which will eventually rise to close to RM6 billion annually when the minimum wage reaches RM1500,” he said.

Meanwhile, Human Resources Minister Datuk Seri M. Saravanan said in a statement that the details of the minimum wage implementation will be announced soon.

Saravanan said the announcement by PM was in line with the decision taken in a Cabinet meeting on March 11.

“It is clearly in line with the government’s commitment to increase wages and workers’ well-being. The move is also expected to make a positive contribution to stimulate the country’s economy through the increased purchasing power of workers, ” he said in a statement today.

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