RM2,000 minimum wage: Firms with sales below RM50m exempt from 2027 hike
BUSINESSES with annual sales below RM50 million will be exempt from the RM2,000 minimum wage requirement when it takes effect in June 2027, as the government seeks to limit the risk of retrenchments and contain cost pressures on employers. Economy Mi...
The Malaysian government plans to exempt businesses with annual sales below RM50 million from a new RM2,000 minimum wage requirement set to take effect in June 2027, aiming to minimize potential job losses and curb costs for employers. Economy Minister Akmal Nasrullah Mohd Nasir announced the exemption during a speech in the Dewan Rakyat, stating the increase from RM1,700 will benefit over four million workers.
The exemption is intended to give micro, small, and medium enterprises (MSMEs) time to adapt to the new wage structure. MSMEs, which constitute 48.7% of Malaysia's workforce, will be particularly affected. The new Minimum Wage Order will be enforced by labor departments in Peninsular Malaysia, Sabah, and Sarawak under the National Wages Consultative Council Act 2011.
Workers can file complaints about non-compliance, and employers who violate the law may face fines or imprisonment under Section 43 of the Act. Retrenched workers may also receive benefits from the Employment Insurance System (EIS), including a Job Search Allowance for up to six months, depending on eligibility. The ministry acknowledged that higher wages could potentially raise prices and living costs, but noted that inflation has remained relatively stable despite previous wage increases.
Inflation has been 1.4% in 2025, down from 1.8% in 2024 and 3.3% in 2022. Despite the wage hike, GDP growth remains strong at 5.4% in the first quarter of 2026 and 6.0% in the second quarter. To counter possible price hikes, the government will enhance enforcement under the Price Control and Anti-Profiteering Act 2011, manage strategic supplies, and expand the Rahmah MADANI Sales programs, with RM700 million allocated for 30,000 targeted sales initiatives in rural areas, low-cost housing zones, and urban PPR schemes.
An additional RM50 million will support 5,000 Agro MADANI Sales programs nationwide, providing affordable fresh produce and food items at 10-30% below market prices. The National Cost of Living Action Council will continue monitoring and implementing measures to alleviate pressure on household budgets.
Written by urgent.news from The Vibes's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
