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Progressive Wage Model pilot allows future fine-tuning, says FMM

FMM In The News: THE STAR, PETALING JAYA, December 1, 2023 - The introduction of the pilot Progressive Wage Model (PWM) will help gauge the weaknesses of the system and allow it to be refined, says the Federation of Malaysian Manufacturers (FMM).
It said the industry welcomed the approach taken by the government, which had heeded FMM's call for the PWM to be voluntary and allow flexibility on its implementation.

"We have said earlier that the introduction must be according to the affordability, profitability and competitiveness of the industries," FMM president Tan Sri Soh Thian Lai said in a statement on Friday (Dec 1).

"It would be a boost to the small and medium enterprises (SMEs) which may be keen to take up the PWM but face resource limitations.

Soh said while the White Paper has provided details on the quantum of incentives, it is unclear if these incentives would be enough as the salary quantum is yet to be determined.

"Indeed the key will be an increase in productivity, which will act as an impetus for SMEs to implement PWM, which would be recognised by multinational companies as they too will reap the benefit of higher productivity levels.

"However, it will be more effective if PWM is rolled out by sectors and skill categories rather than across the board," he added.

Soh said the industry was aware that one of the criteria for the payment of the PWM incentive would be the need to submit proof of the employees' participation in upskilling, which must be relevant and certified by the government.

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