The minimum wage policy, which is due to be implemented next year, needs a comprehensive review, an adequate time for transition and rigorous consultations with stakeholders before the details are finalised.

President of the Federation of Malaysian Manufacturers (FMM), Yong Poh Kon, said a colloquium comprising 31 associations and chambers of commerce has proposed a five-year transition period for the new law to minimise disruptions while optimising the effectiveness of the new policy.

“Change cannot be expected to take place within a short span of time. The Minimum Wage Order gazetted on July 16, 2012 has not fully addressed what constitutes ‘minimum wage’.

“The staggered approach would help alleviate the constraints on new job creation,” he told a media briefing in Kuala Lumpur today.

Yong said an immediate raise in retirement age from 55 to 60 would result in significant reduction in new job openings in existing businesses for the next five years since companies would be compelled to retain nearly one million workers (assuming an average of 180,000 to 200,000 workers retire each year).

This, he said, could in turn cause a “human traffic jam” in new job openings for youths.

“The Minimum Wage Order should be complemented by a definition of ‘minimum wages’ as basic wage plus fixed and annualised variable remuneration.

“It is unrealistic to expect individual companies to renegotiate and implement these changes before Jan 1, 2013 if the details are yet to be finalised,” Yong said.

The gazetted Minimum Wage Order 2012 will take effect on Jan 1, 2013 for employers who hire six workers or more while for employers with five workers or less, the date of enforcement would be July 1 next year.

Yong hailed the recently-announced Voluntary Private Retirement Scheme.

“It is a voluntary scheme announced after deliberating with all stakeholders. FMM welcomes it,” he said.

- Bernama

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