Monday, January 17, 2022

Labour Law Reform Coalition calls on the government to increase the minimum wage to RM1,400 in February 2022, and to RM1,500 in February 2023.


 Press Statement by Labour Law Reform Coalition on 17 January 2022 in Shah Alam


*LLRC calls on the government honours “wage contract” signed with workers in the GE14*


Labour Law Reform Coalition calls on the government to increase the minimum wage to RM1,400 in February 2022, and to RM1,500 in February 2023. 


Given that both Pakatan Harapan (PH) and Barisan Nasional (BN) made promises in their 14th general election manifesto to increase the minimum wage to RM1,500 by the end of the five-year term, the Perikatan Nasional government, which consists of former component parties of PH and BN component parties, should materialize the election promises.


We see the election promise as a “wage contract” in between the political parties and Malaysian workers in the 14th general election, they voted for political parties with the hope that the proposed minimum wage would be implemented. Therefore, politicians should honour their promises and announce the new minimum wage order in accordance with their manifesto text. 


In addition, the government should not delay the implementation of the new minimum wage, which should come into force on 1 February 2022. The previous minimum wage rate took effect on 1 February 2020.


It is important to note that the Act 732 does not prohibit the council to review the order before the two-year period. The government can actually announce the new minimum wage order every year. 


According to article 25 of the National Wages Consultative Council Act 2011 (Act 732), the council shall, at least once in every two years, review the minimum wages order. It is the responsibility of the cabinet to conclude and announce the new minimum wage before the two-year expiration of the previous minimum rate. 


Previously, Malaysian workers were short-changed because the government failed to strictly observe the two-year review period, particularly during 2013 to 2018. We urge the government to insert a new section in the Act 732, requiring the government to announce the revised minimum wage order at least every two years. 


That means, the council shall conduct the studies much earlier, in order for the government to announce the new order before the expiration of the two-year period. The proposed reform can close the loophole that gives the government leeway to delay the implementation of new minimum order without accountability.


Moreover, the average statutory minimum wage increment in the past 8 years is only RM37.5 per year for 56 council and municipal areas, and only RM25 per year for non-council and municipal areas. 


The minimum wage in the rural areas has been stagnant since January 2019, which is unfair because the people in rural areas too suffer from inflation. Thus, the new minimum wage rate should be standardized across Malaysia.


N. Gopal Kishnam & Irene Xavier

Co-Chairpersons

Labour Law Reform Coalition

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