Minister: Employers with less than five workers can defer new minimum wage to July instead

Minister: Employers with less than five workers can defer new minimum wage to July instead

KUALA LUMPUR, Dec 27 — Employers who have less than five employees will only have to start paying a higher minimum wage of RM1,500 from July 2023, instead of the earlier scheduled start date of January 1, 2023, Human Resources Minister V. Sivakumar said today.

Sivakumar said this decision was made after considering the views of various stakeholders who are expected to face economic and financial challenges next year.

The new minimum wage of RM1,500 had already been implemented nationwide from May 1, 2022 for employers who employed five workers or more, while those with less than five staff members were given an exemption and would initially have to start paying the higher rate from January 1, 2023.

“But after taking into account the readiness of employers who employ less than five workers, the government has made the decision to defer the enforcement of the RM1,500 Minimum Wage from January 1, 2023 to July 1, 2023 under this category,” he said in a statement today.

The minister expressed hope that this additional deferment of six months would provide a chance to coordinate and balance financial needs and to help restore the economic position of companies with less than five workers.

However, the Human Resources Ministry stressed that employers who were already required to pay the higher minimum wage rate of RM1,500 from May 1, 2022 must continue to pay this amount to their workers. The postponement to July 2023 for the RM1,500 minimum wage does not apply to them.

These employers who must continue paying RM1,500 as a minimum wage are those who employ five or more than five workers, or employers — regardless of how many they employ — who are carrying out a professional activity classified under the Malaysia Standard Classification of Occupations (Masco) as published officially by the Human Resources Ministry.

The minimum wage of RM1,500 is equivalent to RM7.21 an hour. In daily wages, this translates to RM57.69 for a six-day work week; RM69.23 (five-day work week); and RM86.54 (four-day work week).

Before the new RM1,500 minimum wage rate kicks in next July for these employers with a workforce of below five, these employers will continue to be required to pay at least RM1,200 or RM1,100 depending on where their place of employment is located.

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