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FMM Press Statement: Manufacturers Appreciate Reasonable Increase in Minimum Wage Rates

Kuala Lumpur, September 6, 2018 - The Federation of Malaysian Manufacturers (FMM) thanks the Cabinet led by YAB Prime Minister, Tun Dr Mahathir Mohamad, for heeding the industry’s call to moderate the minimum wage increase and to only implement in 2019. The consideration given to the current challenging economic conditions and regulatory environment affecting businesses is greatly appreciated. 

The announcement to increase the minimum wage rate for Peninsular Malaysia from RM1,000 to RM1,050 per month is reasonable. Although it is unfortunate that the move to equalise rates across the country has to be initiated in one painful move resulting in a RM130 increase for employers in Sabah and Sarawak, the industry views the announcement as positive and would help to alleviate to a certain extent regulatory burdens and their impact on the costs of doing business. 

The four-month lead time before implementation on January 1, 2019 would allow the industry to make necessary budgetary adjustments, including addressing knock-on effects where salaries of staff earning at and near the minimum wage level have also to be adjusted to maintain wage differentials between grades and seniority. However, we expect adjustments this time around to be less extensive in Peninsular Malaysia. 

While the industry in Peninsular understands that the Government is not able to share the burden of this increase, FMM hopes that other forms of assistance could be extended to employers in Sabah and Sarawak to help mitigate the 14% increase in wage cost. 

Moving forward, we also hope that the Government would continue to consult closely with the industry in deploying its phased increase approach. Early consultation would reinforce goodwill as well as give greater certainty and clarity on the mechanism to help businesses in planning their operations and strategies.

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About FMM
The Federation of Malaysian Manufacturers (FMM) has been the voice of the Malaysian manufacturing sector since 1968. Representing over 10,000 member companies (3,000 direct and 7,000 indirect) from the manufacturing supply chain, FMM is actively engaged with government and its key agencies at Federal, State and local levels. FMM is also well-linked with international organisations, Malaysian businesses and civil society. Apart from benefitting from FMM’s advocacy, FMM members enjoy value-add services, including training, business networking and trade opportunities as well as regular information updates.

Media Enquiries:
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