This article first appeared in The Edge Financial Daily on February 27, 2019

PETALING JAYA: The sectoral-based minimum wage being considered by the government is allowed under the law, said Human Resources Minister M Kula Segaran.

Citing Section 22 (1)(b) of the National Wages Consultative Council (NWCC) Act 2011, Kulasegaran said the council may make recommendations to the government on the coverage of the recommended minimum wage by business sector, type of employment and regional areas.

“Therefore, these factors will be taken into account by the NWCC. They will make the necessary recommendations based on townhall meetings and then propose to the government,” he told reporters after a dialogue session with the Federation of Malaysian Manufacturers.

Kula Segaran said he would ensure that the recommendations made would help address both the concerns of employers and employees in the country. He targets for a conclusion on this matter in the next two years.

The minister stressed that the minimum wage, which has been standardised at RM1,100 nationwide, has been maintained.

Yesterday, Kula Segaran said the government would look into the possibility of setting a more realistic minimum wage, according to business sectors.

He said based on feedback from employers located in Sabah, it is found that the increase in the minimum wage has been a “steep jump” and led to higher cost of operations.

However, the minister then received some backlash when the Penang division of the Malaysian Trades Union Congress (MTUC) criticised him for saying the rate was too high for some businesses.

The MTUC, in a statement, reminded the minister of Pakatan Harapan’s pledge in its election manifesto, to raise the minimum wage to RM1,500.

In response, Kula Segaran said: “We will follow our promise to raise the minimum wage rate to RM1,500. However, this will be over a five-year term, not one-year.”