The Federation of Malaysian Manufacturers (FMM) welcomes the decision by the cabinet to heed the industry’s call to moderate the minimum wage increase and to implement it only from Jan 1 next year.

“The consideration given to the current challenging economic conditions and regulatory environment affecting businesses is greatly appreciated,” it said in a statement today.

FMM described the increase in the monthly minimum wage for Peninsular Malaysia from RM1,000 to RM1,050 as reasonable.

“Although it is unfortunate that the move to equalise rates across the country has to be initiated in one painful move resulting in an 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,” it said.

The four-month lead time before implementation would allow the industry to make necessary budgetary adjustments, FMM said.

The adjustments include 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,” it added.

FMM expressed hope that the government would provide some forms of assistance to employers in Sabah and Sarawak to help mitigate the 14 percent hike in wage cost.

“We also hope the government will continue to consult closely with the industry in deploying its phased increase approach. Early consultation will reinforce goodwill as well as give greater certainty and clarity on the mechanism to help businesses in planning their operations and strategies,” it said.

FMM represents over 10,000 member companies – 3,000 direct and 7,000 indirect – from the manufacturing supply chain.

- Bernama