Graduate salary guidelines aim to narrow wage gaps between states

PUTRAJAYA: The National Wages Consultative Council is set to introduce graduate salary guidelines aimed at bridging wage gaps across Malaysia's states, according to chairman Tan Sri Zainal Rahim Seman. The proposed starting salary framework seeks to curb wage disparities and foster a more equitable labor market, Zainal told reporters following a press conference on the Minimum Wages Order 2027.

Wage disparities between states and local authorities can prompt graduates to seek employment in areas offering higher pay, leading to an uneven distribution of the workforce, he explained. Without uniform salary guidelines, wage levels could fluctuate significantly between states and regions. Zainal emphasized that the lack of clear guidelines would result in distorted salaries between states and localities, prompting workers to migrate to higher-paying regions.

The proposed guidelines, he said, would help establish a more balanced approach to graduate starting salaries nationwide, with a particular focus on states like Sabah and Sarawak. The private sector, he noted, required clearer guidance on suitable starting salaries, particularly as public-sector remuneration had undergone changes.

Public-sector workers have transitioned to a different pay level, necessitating government guidelines for private-sector employers to determine appropriate salaries. Zainal highlighted that the council had conducted a more extensive study of graduate starting salaries this year, expanding on previous work that was incomplete. The latest research integrated insights from consultants and researchers to formulate a more systematic framework, ensuring that graduates entering private-sector jobs receive salaries that align with their qualifications.

The government unveiled a proposed RM2,500 minimum starting salary framework for graduates and semi-skilled workers in the 2027 Budget. The Human Resources Ministry is currently formulating the graduate salary guidelines based on the Malaysia Standard Classification of Occupations (Masco) to provide employers with salary benchmarks based on occupations, qualifications, and skills.

While the guidelines are set to be published and implemented in June 2027, the graduate salary framework will initially be introduced through guidelines rather than mandatory wage requirements.