KUALA LUMPUR (Nov 2): Malaysian Employers Federation (MEF) is upset that the minimum wage will be hiked to RM1,100 effective 1 Jan next year, instead of RM1,050 as earlier announced.

Policy flip-flops would erode investor confidence, cautioned MEF executive director Datuk Shamsuddin Bardan, adding the latest wage proposal under Budget 2019 was not discussed with the National Wage Consultative Council and therefore violated the NWCC Act 2011.

“When the government announced the new rate in the Budget, it is a flip-flopping of the policy and was not in accordance with the National Wage Consultative Council Act. There was no meeting or deliberation of the NWCC,” Shamsuddin told theedgemarkets.com when contacted.

He said the NWCC Act provides that the Council deliberates and makes recommendations to the government to be put forward for the consideration of the Cabinet.

“There was no meeting at all,” stressed Shamsuddin who sits on the Council.

Moreover, the Prime Minister Office had already announced on Sept 6 that a standardised minimum wage of RM1,050 per month would apply effective Jan 1, 2019. This was after the Cabinet agreed to the recommendations of the National Wage Consultative Council (NWCC), following a review of the 2016 Minimum Wage Order.

“Now this is like a second review [of the minimum wage] and only within a few weeks [away from the first]. It cannot happen in that manner. The law says a review has to be done once in two years. [But] there was no further meetings once the RM1,050 was decided,” he pointed out.

He warned employers were unlikely to shoulder the additional expenses. “Very few employers have the capacity to absorb that cost. What will normally happen is that these employers will pass on the costs to the consumers, so there will also be increases in the price of services and products.”

Currently, the minimum wage in Peninsular Malaysia is RM1,000 and RM920 in Sabah and Sarawak.