Hamzah warns of inequality in exempting MSMEs from RM2,000 minimum wage

Opposition leader Hamzah Zainudin has criticized the exemption of micro, small and medium enterprises (MSMEs) from the upcoming RM2,000 minimum wage, arguing it will create inequality in the workforce. During the debate on the 2027 budget in the Dewan Rakyat, Hamzah pointed out that MSMEs with annual turnover below RM50 million will continue paying their workers the current minimum of RM1,700, while larger companies will receive the higher minimum wage of RM2,000.

He called for a uniform minimum wage for all workers, along with aid or incentives for struggling employers.

The Prime Minister, Anwar Ibrahim, proposed the MSME exemption to give these businesses time to adjust their business models. However, Hamzah contends that the RM300 gap between the two minimum wages would encourage MSME workers to seek employment in higher-paying companies, making it harder for smaller employers to retain their workforce.

He questioned the 0.1% decrease in income tax for MSMEs, asserting it will not benefit companies that have not yet turned a profit. Hamzah suggested that the funds for MSME incentives be provided through the Social Security Organisation to help small employers increase salaries while boosting productivity. He proposed a one-percentage-point corporate tax exemption for three years for non-MSME companies that increase employee wages to the new minimum level, arguing that a government willing to assist MSMEs in transitioning to higher wages is one that empathizes with their challenges.