KUALA LUMPUR (July 13): The Federation of Malaysian Manufacturers (FMM) said the country's minimum wage (MW) should not increase immediately to RM1,500 but spread over a five-year period with the first increase in 2019. This is to help employers cope with higher manpower cost.

The FMM said in a statement today that the government should honour its election promise to share the increase in MW with employers.

"However, the intention to standardise MW rates in Sabah and Sarawak with Peninsular (Malaysia) should be reviewed as the former would not be able to sustain the significant increase. Concurrently, the allowable monthly housing deduction for FW (foreign workers) should be increased from RM50 to RM150. Implement multi-tiered (market-based) levy mechanism including ploughing back levy collected to support industry's automation and adoption of Industry 4.0 technologies; but in the meantime, levy burden should revert back to FWs.

"The definition of MW should be reviewed as total remuneration i.e. basic wage and all fixed cash payments and allowances defined as wages under Section 2 of Employment Act 1955. MW increase must commensurate with productivity gains with greater effort towards implementing the productivity-linked wage system," the FMM said.