Employment Law: Minimum Wages in Malaysia
Employment Law: Minimum Wages in Malaysia

Employment Law: Minimum Wages in Malaysia

Introduction

Minimum wages is defined by the International Labour Organisation (‘ILO’) as ‘the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract’

The Malaysian law in this respect was found in subsidiary legislation being the

(collectively, ‘the 2018 Orders’) both of which came into force on 01.09.2019.

The 2018 Orders was passed by the Human Resource Minister as empowered under Section 23 of the National Wages Consultative Council Act 2011 (‘the 2011 Act’).

It is an Act to basically establish a National Wages Consultative Council with the responsibility to conduct studies on all matters concerning minimum wages and to make recommendations to the Government to make minimum wage orders accordingly. It shall then review the minimum wage order at least once every two years.

Minimum Wages Rates

As provided under the 2018 Orders, which came into effect from 01.01.2019, the minimum wages rates payable to an employee by the employer in Malaysia shall be as follows:-

Minimum Wages Rates
MonthlyDailyHourly
RM1,100.00Number of Working Days in a WeekRM5.29
6Rm42.31
5Rm50.77
4RM63.46

The above-prescribed minimum wage rates, however, are not applicable to a domestic servant.

A domestic servant is defined as a person employed in connection with the work of a private dwelling-house including a cook, house-servant, butler, child’s nurse, valet, footman, gardener, washerman or washer-woman, watchman, groom, and driver or cleaner of any vehicle licensed for private use.

Minimum Wages Rates in certain City Councils or Municipal Council areas

With effect from 01.02.2020, the minimum wages rates payable to an employee by the employer in certain City Councils or Municipal Council areas in Malaysia shall be as follows, in accordance to Minimum Wages Order 2020:-

Minimum Wages Rates
MonthlyDailyHourly
RM1,200.00Number of Working Days in a WeekRM5.77
6Rm46.15
5Rm55.38
4RM69.23

Conclusion

It is noted that Malaysia has since ratified the ILO’s Minimum Wage Fixing Convention, 1970 on 07.06.2016 which requires the ratifying states to establish a minimum wage fixing machinery capable of determining and periodically reviewing and adjusting minimum wage rates and having the force of law.

As such, it is believed that our current state of the law on minimum wages as well as its future should continue to be shaped by its development at the international level.

 
About the Author: 

This article was written by Chia Swee Yik, Partner of this Firm (+6016 2148 218, chia@chialee.com.my), who endeavors to provide practical advice on employment law.

Feel free to contact him if you have any queries.

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