Proposed RM3,100 minimum wage could shock labour market, says FMM

In a statement, FMM president Jacob Lee said an increase from the current minimum wage of RM1,700 to RM3,100 would be unprecedented, as adjustments have been made progressively since the statutory minimum wage was introduced in 2013.

“The current RM1,700 rate has also only been fully implemented across all employers since August 2025, and businesses are still adjusting to its impact,” said Lee.

MTUC had called for the minimum wage to be raised to RM3,100 a month, citing rising living costs and the need for wages to better reflect workers’ skills, education and experience.

Its secretary-general Kamarul Baharin Mansor said RM3,100 was a reasonable new minimum wage, taking into account the increased cost of housing, food, transportation and other basic necessities.

However, Lee said MTUC’s proposed rate would be closer to the median monthly wage earned by formal-sector employees (RM3,167 in December 2025), which would “substantially compress the wage structure of many companies”.

Lee said employers would be pressured to adjust the salaries of skilled workers in subsequent salary bands, causing the actual increase in payroll costs to rise far beyond the direct costs incurred in the minimum wage hike.

“A sudden and substantial increase in payroll costs could affect business viability, discourage investment and expansion, accelerate the relocation or outsourcing of operations, and reduce employment and entry-level job opportunities,” he said.

He also said the proposed increase of RM1,400, or 82.4%, would put Malaysia’s minimum wage at twice the level of its Asean manufacturing competitors.

He said if this adjustment were implemented without an equally high increase in productivity, it would weaken the cost competitiveness of Malaysia’s labour-intensive industries internationally.

Last week, human resources minister R Ramanan said the government was reviewing the RM1,700 minimum wage, with a final decision on maintaining or raising the amount to be made by the National Wages Consultative Council.

Source of article: freemalaysiatoday.com