Saturday, March 16, 2013

Shortage of workers pushes wages above the minimum of RM800

KUCHING: The lack of construction labourers in Sarawak has driven the monthly pay of such workers to above the minimum wage of RM800.
However, a significant number of labourers are still daily paid workers, mostly without Employees Provident Fund (EPF) and Social Security (Socso) benefits.

Developers and building firms say the high demand for labourers by the construction industry in the Sarawak Corridor of Renewable Energy (SCORE) has created shortages everywhere else.
“When it comes to pay, the workers are calling the shots now. You can’t get enough of them,” Cahya Mata Sarawak Bhd managing director Datuk Richard Curtis told The Star here yesterday, during a media meet-and-greet session.
“I would say that most, if not almost all, are getting higher pay rates than the minimum wage. Some (employers) might still try to get away with (paying) less, but I’d say only the most unskilled workers are the ones who might still be on RM600 monthly.”
Real challenge: Curtis during a media meet-and-greet session. - ZULAZHAR SHEBLEE/The StarReal challenge: Curtis during a media meet-and-greet session. - ZULAZHAR SHEBLEE/The Star
Curtis said the minimum wage had been “100% implemented” by the CMS group — one of the largest conglomerates in Sarawak, employing some 2,000 workers.
He also said that barring exceptional circumstances, companies that were profitable should not be given deferments by the Government.
“It is wrong for profitable companies to ask for deferments. Anyway, CMS is a large company in this state. I believe we should set an example by implementing the minimum wage.”
The minimum wage ruling came into effect last Jan 1. In Peninsular Malaysia, the minimum is RM900, while in Sarawak and Sabah it is RM800.
Employers with fewer than five workers have been allowed a grace period of until the middle of the year.
Curtis said the real challenge of the policy was actually to adjust salaries of those who were already earning about RM800 before.
“It led to some issues of adjusting salaries for people who were at the minimum wage level or just slightly above. We’ve worked with outside consultants to help us ensure that the wage adjustments have not created any distortions.”
The implementation of minimum wage in Malaysia has been troublesome. In January, around 1,000 workers in Samalaju staged a four-day protest, complaining that foreigners were stifling wage growth, and that employers continued to flaunt social safety net requirements.
While declining to be specific, Curtis said there were “labourer contractors” who have wrongfully denied employees’ rights and benefits.
He said the solution was for companies to be less reliant on labourer contractors, and to build up their own team of permanently employed labourers.
“With higher pay, it means employers must take greater interest in their workers — because I’ve got to pay you more, I better train you to do more. This is all good,” Curtis said.
But Sarawak Housing and Real Estate Developers’ Association (Sheda) said not all companies could afford a permanent team of labourers. Its secretary general Sim Kian Chiok told The Star not all firms could consistently ensure enough work for their workers.
He said the need for labourer contractors would remain high due to the flexibility it allowed construction firms.
“There is more financial and legal implications when labourers are employed permanently. Not all companies can do it,” Sim said, adding that a significant number of labourers themselves wanted to be paid daily rather than receive monthly salaries.
“Employers have problems too. First, productivity in Sarawak is lower than elsewhere in Malaysia. Second, Sarawakian labourers tend to take leave without notice. As such, many ask to be paid daily. And then there are those who genuinely need work immediately but cannot be paid because they don’t even have bank accounts,” Sim said.
Overall, the Sheda secretary said pay levels for labourers were above and beyond minimum wage. He said the policy had been made redundant by market forces.
“The positive force of SCORE has created significantly higher demand in a very short span of time. Labour cost is about 30% of direct expenditure to building firms but price increases is also coming from the manufacturing sector, which is affected more by the minimum wage policy.”
Regarding deferment, Sim said they were useless because workers would leave and find jobs elsewhere with higher pay.
“People can communicate very easily these days. What’s the point of getting the deferment? Your workers will just walk away to the next job opportunity.”

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