Minimum Wage Could Go Up To RM3,100? Employers Say Small Businesses May Struggle
The Malaysian Trades Union Congress (MTUC) says RM1,700 is no longer enough for workers facing higher living costs, but employer groups warn that a sharp increase could burden small and rural businesses.
The Malaysian Trades Union Congress (MTUC) has called for the minimum wage to be raised to RM3,100 a month, describing the figure as a living-wage benchmark.
MTUC secretary-general Kamarul Baharin Mansor said the figure should guide the review of the current RM1,700 minimum wage, citing rising costs for food, housing and transportation.
Kamarul Baharin said a structural issue also needed to be addressed, alleging that some workers remained on RM1,700 after 10 years because there was no wage scale to ensure their pay increased over time.
A wage scale, he said, would also help middle-income earners, ease skills mismatches, and help companies hold onto talent.
Malaysia’s minimum wage was raised to RM1,700 in February 2025, although implementation was phased for some smaller employers.
Under the National Wages Consultative Council Act, the minimum wages order must be reviewed at least once every two years. The government is expected to conduct its next review ahead of the next review deadline, although it has not announced when any revised rate would take effect.
Kamarul Baharin said any delay would pile more pressure on workers already squeezed by rising costs.
Human Resources Minister Datuk Seri R. Ramanan said on 18 August that the ministry was reviewing whether to raise or retain the RM1,700 minimum wage. MTUC described the review as a positive development.
However, two employer groups said any increase should take account of businesses’ capacity to absorb higher labour costs.
The Small and Medium Enterprises Association of Malaysia (Samenta) said any increase should account for business size and location, rather than be applied uniformly.
Samenta president William Ng said a blanket hike would hit small and rural businesses hardest.
Larger companies, MNCs, GLCs and SMEs in the Klang Valley will be able to absorb the increase easily, Ng said, adding that their wages were already generally above the minimum rate.
Micro-enterprises and rural businesses won’t have that cushion, he said.
Ng said higher labour costs could be passed on to consumers, potentially adding to inflationary pressure.
He called for measures such as lower regulatory fees or utility rebates to help SMEs absorb any increase in labour costs.
The Malaysian Employers Federation (MEF) said minimum-wage increases should be linked to productivity gains.
MEF president Syed Hussain Syed Husman said an unsustainable wage increase could ultimately put jobs at risk.
He called for a system where businesses grow more productive, workers gain higher-value skills, and wages rise on the back of both.
Ramanan said the review would take into account factors including the poverty line, median wage, employers’ capacity, inflation, productivity and unemployment.
