KUALA LUMPUR (Dec 20): Manufacturers and company owners have “questioned” the timing and government’s choice of 57 major towns and cities that will have a rise in the minimum wage from RM1,100 to RM1,200 beginning Jan 1 next year, reported The Star today.

Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said “how the 57 areas were chosen was ambiguous and not clear”.

“The ministry should state the per capita income of the 57 towns,” Soh told The Star.

“The Human Resources Ministry should hold a consultation immediately with relevant stakeholders on the definition of the areas chosen and the method of implementation of the minimum wage,” he said.

“The notice period given by the government was too short for such a minimum wage to be implemented by manufacturers in these towns.

“Furthermore, this minimum wage is supposed to be gazetted under Minimum Wage Order.

“The time given to employers is too short for any proper preparation,” Soh added.

Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan told the English daily that the minimum wage hike should take into consideration where “where the wages would finally end up and if it would help the local economy”.

“Most of these lower-end workers, whose wages are to be raised in line with this ruling, are foreign workers.

“We cannot discriminate between foreign and local workers, but the fact is most of them are foreigners.

“These foreign workers would only spend a bare minimum here and remit most of their wages to their home countries. How will this assist the local economy?

“As it is, the current economic situation is a bad one for local companies. Even big retail companies are closing stores in major cities.

“With such a ruling to increase the minimum wage to RM1,200 by January 2020, I expect more companies will have to shut as well,” Shamsuddin warned.

Malaysian Rubber Glove Manufacturers Association president Denis Low Jau Foo said prices of medical rubber gloves will go up next year when the increase in minimum wage is enforced.

“The latest wage increase for urban workers is inevitable given the higher cost of living in the cities, but it will have a ripple effect on everything from support services, packaging materials, logistics and chemicals to raw ingredients.

“We will have to adjust and factor in this additional cost to our products,” Low explained.

They all also said that consumers should expect price increases.

Meanwhile, Human Resources Minister M. Kulasegaran said the move to raise the minimum wage to RM1,200 was a “Cabinet decision made in consultation with the National Wages Consultative Council (NWCC)”

The Star reported Kulasegaran saying that the increase was entirely within the National Wages Consultative Council Act 2011 which stated that the minimum wage must be reviewed at least once every two years.

“We are keeping to the roadmap of the government to reach a RM1,500 minimum wage, as promised within the first term of Pakatan Harapan as the government, and this is one way to do it.

“We realise the economy is not doing well and this is why we are not implementing it nationwide this time. We are only implementing it in 57 chosen major towns and cities,” he said.

Kulasegaran added the 57 towns and cities were chosen after consultation and “if there were those who disagree, they could always write to him”.

On Wednesday, the government announced that the new RM1,200 monthly minimum wage will be implemented on Jan 1, 2020 in the administered area of 57 city councils.

The Ministry of Human Resources said in a statement that the minimum wage would remain at RM1,100 a month in towns that are not considered as part of these councils.

"The hourly and daily minimum wage rate for workers that are paid a piece rate, commissions, tonnes and tasks will be detailed in the new Minimum Wage Order," said the ministry.

The implementation of the minimum wage of RM1,200 a month in major urban areas and RM1,100 a month in areas outside that is based on their work place, which, as defined under Section 2 of the Employment Act 1955 (Act 265), the Sabah Labour Ordinance (Chapter 67) and the Sarawak Labour Ordinance (Chapter 76), is wherever work is carried out by employees for their employers.

The minimum age remains applicable for all employees in the private sector, the ministry said, except for domestic servants, as maintained in the Minimum Wages Order 2018.

Towns where the new minimum wage will be implemented: