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

The Federation of Malaysian Manufacturing (FMM) has warned that the proposed RM3,100 minimum wage by the Malaysian Trades Union Congress (MTUC) could significantly disrupt the labour market. Currently, the minimum wage stands at RM1,700, a figure that was fully implemented across all employers in August 2025, although businesses are still adjusting to its impact. FMM president Jacob Lee cautioned that an increase from RM1,700 to RM3,100 would be unprecedented, as the wage has only been fully implemented since August 2025.

Lee pointed out that the proposed RM3,100 wage is the median monthly wage for formal-sector employees, which has risen to RM3,167 in December 2025. This would substantially compress the wage structure of many companies, as employers may be pressured to adjust salaries for skilled workers in subsequent bands. This could lead to a sharp rise in payroll costs, potentially affecting business viability and investment, and could accelerate the relocation or outsourcing of operations.

The proposed increase of RM1,400, or 82.4%, would also make Malaysia's minimum wage twice that of its Asean manufacturing competitors.

FMM's concerns highlight the potential negative consequences of such a rapid and substantial increase in payroll costs, including reduced employment opportunities and lower cost competitiveness of Malaysia's labour-intensive industries on the international stage. The government is currently reviewing the RM1,700 minimum wage, with a final decision to be made by the National Wages Consultative Council.