MSMEs exempted from further minimum wage increases for now

The Malaysian Cabinet has decided to exempt micro, small and medium-sized enterprises (MSMEs) from further minimum wage increases, according to entrepreneur development and cooperatives minister Steven Sim. While the government acknowledges the need for wage increases, Sim emphasized the importance of protecting MSMEs that are grappling with operating cost pressures and economic challenges.

The decision was made during a meeting today, where the Cabinet agreed that wages should be increased but also recognized the need to safeguard MSMEs facing financial difficulties. To boost workers' wages in the MSME sector, the government will explore alternative measures, such as wage subsidies under the Progressive Wage Policy, ensuring that wage increases are aligned with productivity gains.

Sim stressed that the government's objective is to maintain worker welfare through more reasonable wages while preserving the competitiveness of MSMEs to continue expanding and creating employment opportunities. In August, human resources minister R Ramanan stated that the government was reviewing the RM1,700 minimum wage, with a final decision to maintain or raise the amount to be made by the National Wages Consultative Council.

The review would take into account economic indicators such as the poverty line, median wage, inflation, labour productivity, and unemployment rate. The RM1,700 minimum wage has been in place since August 2025 and applies to all workers in Malaysia, excluding domestic workers.