The Malaysian Employers Federation (MEF) has warned private sector employees of lower pay rises and bonuses for 2014, citing rising costs as the reason.

The New Straits Times reported that the rising costs included the minimum wage policy and the increase in retirement age limit, and that the lower increase in wages would affect both the executives and non-executives.

MEF, through its executive director Shamsuddin Bardan, said companies are feeling the pinch due to rising costs of doing businesses.

“Employers are cautious in handling revenue as it may be difficult to meet their target next year. Employers have to adjust to the full impact of the new electricity tariff rate and minimum wage implementation,” said Shamsuddin.

He said a survey by the federation found that executives can expect a 5.63 percent average increase in pay, while non-executives can expect a hike of 5.5 percent.

A rate of RM900 is implemented as the minimum wage in peninsular Malaysia,  while workers in Sabah and Sarawak will have RM800 as minimum pay.

Despite such a forecast, Malaysian Trades Union Congress president Mohd Khalid Atan said the minimum wage should not be deterrent for increments.

“The minimum wage and retirement age limit are different issues compared to what the company is supposed to give, such as annual increments or bonuses. It is not right to use the minimum wage or retirement age as an excuse,” said the MTUC president.