RM3,100 GLC wage no basis for national minimum, say employers

Employers argue that setting the national minimum wage at RM3,100 per month, as proposed by the Malaysian Trades Union Congress, would be problematic for small businesses. The Malaysian Employers Federation and Federation of Malaysian Manufacturers contend that GLCs and government-linked companies are not suitable benchmarks for determining wage levels, as they operate under different conditions compared to small and medium enterprises.

MEF senior advisor Syed Hussain Syed Husman highlighted that GLCs and GLICs have distinct profit margins, productivity levels, and the ability to absorb higher wage costs. The statistics department has already reported that the median monthly wage in the formal sector is RM3,027, surpassing the current minimum wage of RM1,700. Raising the minimum wage by 82.4% could lead to increased expenses such as overtime pay, statutory contributions, and salaries for higher-ranking employees.

The Malaysian Trades Union Congress had requested a RM3,100 minimum wage under the upcoming Budget 2027, which will be discussed in the Dewan Rakyat on October 9. The government has set this figure as a living wage for GLC and GLIC employees. A cost-of-living study by the Employees Provident Fund and Universiti Malaya suggests that a monthly income of RM3,100 would allow families to live comfortably and support their development.

Prime Minister Anwar Ibrahim previously revealed that 34 GLCs and GLICs have already adopted the RM3,100 living wage. FMM president Jacob Lee emphasized that worker compensation should increase when companies perform well, but the profits of a few successful firms cannot represent the general business landscape. He pointed out that a significant wage hike would impact more experienced workers, as companies would need to maintain a distinction between junior and senior staff.

William Ng, from Samenta, concurred that the RM3,100 minimum wage might be excessive for most small businesses, potentially leading to layoffs or even closures. He stressed that small firms are already grappling with rising costs for electricity, transport, and raw materials, and that wage increases should be implemented gradually with increased government support.