Minimum wage debate: What workers want, what employers say and what comes next

KUALA LUMPUR, Oct 8 — Malaysia’s minimum wage is once again under the spotlight, with workers pushing for higher pay while employers warn against a steep increase as the federal government weighs its options ahead of Budget 2027.

The minimum wage is the statutory floor for basic pay that an employer must pay a covered worker — it does not include allowances, incentives or other additional payments.

But before getting into the arguments being made today, here is a quick look at how Malaysia’s minimum wage has changed over the years.

When did Malaysia introduce the minimum wage?

Malaysia’s minimum wage currently stands at RM1,700 a month.

But did you know it was not always at this level?

In fact, Malaysia first introduced a statutory minimum wage through the Minimum Wage Order (MWO) 2012, which took effect in January 2013, setting the country on a path of periodic wage increases.

The rate was initially set at RM900 a month in Peninsular Malaysia and RM800 in Sabah, Sarawak and Labuan.

The MWO was then amended in April 2016, raising the rate to RM1,000 a month in Peninsular Malaysia and RM920 in Sabah, Sarawak and Labuan, effective July that year.

It was amended again in 2018, when the government introduced a single nationwide rate of RM1,100 starting in January 2019, effectively removing the regional difference.

The MWO was amended for a third time in December 2019, when the government set the minimum wage at RM1,200 for urban areas and RM1,100 for rural areas, based on the locality of the relevant local authority, effective February 2020.

In April 2022, an amendment to the existing MWO was made and the government introduced a single nationwide minimum wage of RM1,500, which took effect in January 2023.

The most recent increase came in December 2024, when the government introduced the current minimum wage of RM1,700, which took effect in February 2025.

So where does the debate stand? 

The next question, then, is when the minimum wage is due for review.

Under Section 25(1) of the National Wages Consultative Council Act, the Council is required to review the minimum wage order at least once every two years.

With the current RM1,700 rate having taken effect in 2025, the minimum wage is due for review by 2027.

Nevertheless, in August, the Malaysian Trades Union Congress (MTUC) proposed raising the national minimum wage to RM3,100, describing it as a necessary “living wage” benchmark.

MTUC secretary-general Kamarul Baharin Mansor was quoted as saying the amount should be considered to reflect the rising costs of food, housing, transportation and other necessities.

He also called for expanding the wage structure to cover middle-income workers whose salaries have remained stagnant at the minimum rate, with some still earning RM1,700 despite a decade of service due to the lack of a defined salary progression framework.

In response, both the SME Association of Malaysia and Malaysia Retail Chain Association (MRCA) called on the government to defer any minimum wage increase for now, citing challenging operating conditions.

They cautioned that a blanket increase could severely strain SMEs already grappling with economic headwinds, saying they were not opposed to better wages but stressed that structural support was needed to help businesses absorb higher labour costs.

As for the government, Human Resources Minister Datuk Seri R. Ramanan said in August that the National Wages Consultative Council would review the current minimum wage to decide whether to maintain or raise the rate.

However, by September, Ramanan said no decision had yet been made on a new minimum wage rate, adding that any announcement would only follow Cabinet approval.

With Budget 2027 set to be tabled by Prime Minister Datuk Seri Anwar Ibrahim in the Dewan Rakyat on October 9, attention is now turning to whether the government will announce any changes to the current RM1,700 minimum wage.