Malaysia: Deferred minimum wages order for micro businesses

In brief

The Government of Malaysia has announced that the implementation of the minimum wage of RM 1,500 (approximately USD 340) for employers with fewer than five employees who do not carry out a professional activity classified under the Malaysia Standard Classification of Occupations (MASCO), will be postponed from 1 January 2023 to 1 July 2023. 


The Minimum Wages Order 2022 

Earlier this year, the Minimum Wages Order 2022 ("MWO 2022") came into force on 1 May 2022 and increased the national minimum wage to RM 1,500 per month. The minimum wages were previously at the rates of RM 1,200 or RM 1,100, depending on the location of the workplace. 

However, employers with fewer than five employees who do not carry out a professional activity classified under MASCO, such as legal, accounting and engineering, were given a longer runway to implement the MWO 2022. For this category of employers, the MWO 2022 was to apply to them with effect from 1 January 2023. 

Deferment from 1 January 2023 to 1 July 2023

On 28 December 2022, the Minimum Wages (Amendment) (No. 2) Order effectively postponed the implementation date from  1 January 2023 to 1 July 2023. 

The new Minister of Human Resources ("Minister") V Sivakumar announced that this was decided after taking into account the views of various parties and stakeholders who are expected to face economic and financial challenges in the year 2023. The Minister also took the opportunity to remind other employers to continue complying with the MWO 2022, which came into force on 1 May 2022. 

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