Kuala Lumpur:The Malaysian Employers Federation (MEF) has expressed support for the proposed increase in the national minimum wage to RM2,000 as outlined in Budget 2027, highlighting it as a positive step towards enhancing workers' incomes and living standards.
According to BERNAMA News Agency, MEF senior advisor Datuk Dr Syed Hussain Syed Husman commended Human Resources Minister Datuk Seri R. Ramanan for advocating an exemption for micro, small, and medium enterprises (MSMEs) with annual sales below RM50 million. He described this as a pragmatic initiative that acknowledges the challenges faced by smaller businesses.
The MEF also welcomed the government's decision to allow employers until June 1, 2027, to prepare for the new minimum wage. Syed Hussain noted that this transition period would enable businesses to review their wage structures, assess financial implications, and make necessary operational adjustments.
Adequate preparation time is crucial for employers, especially MSMEs, to adapt to the wage adjustment without causing disruptions to employment and business operations. Smaller enterprises often grapple with tight profit margins, rising expenses, limited financing access, and productivity challenges, making their financial capacity an important consideration in implementing wage policies.
Syed Hussain emphasized that the goal should be to sustainably raise workers' incomes while ensuring businesses remain competitive and continue hiring. Protecting the growth capacity of MSMEs is vital for safeguarding Malaysian jobs.
He further stressed the importance of clear eligibility criteria and transparent guidelines in determining which businesses qualify for the proposed exemption, including clarity on the RM50 million annual sales threshold assessment.
The MEF also acknowledged the Prime Minister's message encouraging employers capable of doing so to pay wages above the minimum rate, emphasizing that fairly rewarding employees is a critical investment that attracts talent, boosts productivity, and supports business growth.
During his Budget 2027 announcement in the Dewan Rakyat, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim stated that the wage increase from RM1,700 to RM2,000 would take effect in June 2027, benefiting over four million workers. Anwar also noted that MSMEs with annual sales below RM50 million would be exempt from the new rate, allowing them to adjust their business models accordingly.