LETTER | On May 1, the minimum wage was increased to RM1,500. However, the minimum wage for interns was excluded from the policy change. Policymakers should amend the employment acts to offer minimum wage protection to interns as well.

Internships, formerly known as apprenticeships, are often considered “free labour”. Despite the rise in the minimum wage, interns will continue to receive low pay. This is because interns are neither covered by the Employment Act 1955 nor the National Wages Consultative Council Act 2011.

According to these employment acts, only employees are protected with the minimum wage. By definition, employees refer to individuals who entered into a contract of service for at least two years. This provision does not cover most interns due to the short internship period.

In 2019, former youth and sports minister Syed Saddiq Syed Abdul Rahman announced an increase in the minimum allowance for internships at federal government departments from RM300 to RM900 per month. However, this does not apply to the private sector.

Years later, in 2022, interns in the private sector are still being offered RM300 to RM900 per month. Some interns are even unpaid. Adding to this, some human resources executives have normalised the payment amount as reasonable and acceptable.

Although it is legal for the companies to pay interns a lower allowance, how can RM300 to RM900 monthly be sufficient for an individual to live off, particularly those living in urban areas?

Interns are generally young people aged 18 to 24. Without the minimum wage protections, companies often hire interns without worrying about recruitment costs.

It was reported that, since interns are mostly inexperienced, employers usually assign interns routine tasks that add zero value to their resumes.

Directly or indirectly, the low wages offered to interns contribute to the brain drain issue in Malaysia. Based on recent statistics, Malaysia is among the countries highly affected by the brain drain issue. Annually, Malaysia’s brain drain rate increases by 6 percent, indicating the number of people emigrating from Malaysia increases proportionally.

In March, Subang MP Wong Chen suggested the government improve wages for graduates to decrease the brain drain by at least 30 percent. He claimed that 70 percent of fresh graduates migrated to other countries due to the wage issue. This has resulted in poor country development and economic growth.

“If these Malaysians have an average income of RM15,000 per month, the country’s economy and gross domestic product would have lost RM216 billion in revenue, which is my conservative estimate, and RM54 billion in income tax revenue,” Wong said.

Apart from leading to the brain drain, the absence of minimum wage protection has caused the youth unemployment issue.

According to the Department of Statistics (DOSM), Malaysia's unemployment rate in January declined to 4.2 percent while the youth unemployment rate between 15 and 24-year-olds was 13.2 percent. Statistics revealed the unemployment rate in this age group increased from 11.03 percent (2018) to 11.72 percent (2020).

Perhaps policymakers are unaware that low wages offered to interns are the root cause of the youth unemployment issue.

As mentioned, companies often hire interns to fulfil temporary positions. Other than gaining minimum experience within the period spent, interns could not enrich their skills and resume, leading to low competitive ability. Thus, unemployment.

To address the youth unemployment issue, the government has the Career Advancement Programme (KPT-CAP) that aided a total of 19,266 unemployed graduates to secure a job through this programme.

What about interns who are required to complete industrial training as requested by the academic institution?

In Malaysia, most academic institutions set industrial training as part of the compulsory course syllabus. These students are usually required to fulfil at least 12 weeks to six months of industrial training, working as an intern in the industry. The exclusion of interns from the minimum wage protection often caused the efforts contributed by interns to be denied.

Thus, actions should be taken by policymakers to ensure the rights of interns are protected.

With regard to the issues encountered by the interns due to low minimum wages, the policymakers should make amendments to the policies. Specifically, interns should be considered an employee of a company regardless of the duration of the contract of service signed. With that, the efforts of interns could be recognised and counted.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.