Labour Day 2022 – Implementation of the Minimum Wages Order 2022
This 1st of May 2022 marks a very different Labour Day.
On 27 April 2022, Health Minister Khairy Jamaluddin announced new relaxed Covid-19 rules and SOPs starting 1st of May 2022. Where the list of activities prohibited by MKN will be allowed starting 1st of May 2022 and all the economic sectors are allowed to operate starting 15th May 2022.
Except for the new relaxed Covid-19 rules, the widely-anticipated Minimum Wages Order 2022 (“the Order”) was gazetted on 27 April 2022 and Malaysia will increase the national monthly minimum wage from RM1,200 to RM1,500 effective on the 1st of May 2022. The Order also provides minimum wage rates for the employees on a daily or hourly basis, as set out in the table below:
In the view of some employers complaint that the increase in the minimum wage is too soon and too steep as many businesses have yet to fully recover from the pandemic, the Order on the other hand provides a temporary exemption until 31 December 2022 for employers with less than 5 employees. Where the existing minimum wage rates under Minimum Wages Order 2020 will continue to apply to the exempted employers until 31 December 2022.
However, this exemption does not apply to employers who carry out professional activities (as classified under the Malaysia Standard Classification of Occupations published by the Ministry of Human Resources), regardless of the number of employees.
As such, employers should take necessary actions to comply with the Order, in which may include :
to identify whether the employer are affected;
to communicate the salary adjustment with the employees;
to record the increment in writing;
to reallocate the company's fund;
to restructure the company's workforce; etc.
Take note that an employer who fails to pay the basic wages as specified in the Order commits an offence under National Wages Consultative Council Act 2011 and will be liable to a fine of not more than RM10,000.00 for each employee.