Five business groups have criticised the blanket nature of the minimum wage policy, saying it has not taken into consideration the income disparity between businesses in the urban and rural areas.

The groups said the quantum to be considered as minimum wage should be based on where a business was operating.

NONE At a joint press conference yesterday, Federation of Sundry Goods Merchants Associations of Malaysia (FSGMAM) president Lean Hing Chuan said it was not practical for his group's members operating in rural areas to pay a minimum wage of RM900 because of their smaller turnover.

“We pay our employees between RM400 and RM500. But now government orders us to pay RM900. How can we survive?” Lean asked, adding that the current salary was sufficient for people in the rural areas.

If the policy was not reviewed, he said, businesses would be affected, workers retrenched and consumers will bear higher cost of goods.

The FSGMAM's position is shared by Malaysia-Singapore Coffee Shop Proprietors’ General Association (MSCSSPGA), Malaysian Muslim Restaurant Owners Association, Malaysian Indian Muslim Restaurant Association and Federation of Malaysia Hawkers Association.

'Exclude foreign workers'

On the eve of Workers Day in 2012, Prime Minister Najib Razak set a minimum wage rule of RM900 for workers in Peninsula Malaysia and RM800 for those in Sabah and Sarawak.

Najib said the minimum wage would cover workers in all sectors of the economy, including wages for foreign workers.

Meanwhile, MSCSSPGA president Ho Su Mong said foreign workers should not be included in the policy because of the high levies employers need to pay to hire them.

NONE “We have to pay capitation tax and three types of insurance for them. On top of that, we provide food and accommodation, too.”

As such, Ho ( left ) urged the government to allow food and accommodation allowance to be taken into the calculation of wages quantum.

Malaysian Muslim Restaurant Owners Association president Noorul Hassan Saul Hameed said the policy, in its current form, meant higher labour costs.

He estimated that the restaurant employers now need to pay an additional RM1,000 to each foreign worker, up 70 percent from the current rate.

The move is expected to reduce the profit of the association's 3,200 members by 40 percent, Noorul Hassan said.

The five associations will be petitioning the human resources minister to ask for a 12-month grace period before implementing the policy.