MEF Welcomes RM2,000 Minimum Wage, MSME Exemption

PETALING JAYA, Oct 9 (Bernama) -- The Malaysian Employers Federation (MEF) has welcomed the proposed increase in the national minimum wage to RM2,000 under Budget 2027, saying it reflects the government’s commitment to improving workers’ incomes and living standards.

MEF senior advisor for Government, Media and International Engagement Datuk Dr Syed Hussain Syed Husman said the federation also appreciated Human Resources Minister Datuk Seri R. Ramanan for advocating an exemption for micro, small and medium enterprises (MSMEs) with annual sales below RM50 million.

“This is a timely and pragmatic initiative that recognises the realities faced by smaller businesses,” he said in a statement following the tabling of Budget 2027 by the Prime Minister Datuk Seri Anwar Ibrahim today.

He said MEF also welcomed the government’s decision to give employers until June 1, 2027, to prepare for the new minimum wage, saying the transition period would allow businesses to review wage structures, assess financial implications and make the necessary operational arrangements.

Syed Hussain added that adequate preparation time was important to enable employers, particularly MSMEs, to adapt to the wage adjustment while minimising disruptions to employment and business operations.

He said smaller enterprises often faced tighter profit margins, rising operating expenses, limited access to financing and productivity challenges, making it important to consider their financial capacity when implementing wage policies.

“We must ensure that higher wages translate into better livelihoods, not fewer job opportunities. The objective should be to raise workers’ incomes sustainably while enabling businesses to remain competitive, continue hiring and invest in productivity. Protecting the capacity of MSMEs to survive and grow is a way of protecting Malaysian jobs,” he said.

He added that clear eligibility criteria and transparent implementation guidelines would be important in determining which businesses qualify for the proposed exemption, including clarification on how the RM50 million annual sales threshold would be assessed.

Syed Hussain said MEF also acknowledged the Prime Minister’s message that employers performing well and having the capacity to do so should pay wages above the minimum wage, noting that employees were a company’s most valuable asset and rewarding them fairly was an important investment in attracting talent, improving productivity, strengthening employee commitment and supporting business growth.

When tabling Budget 2027 in the Dewan Rakyat today, Anwar, who is also Finance Minister, said the government had agreed to raise the minimum wage rate from RM1,700 to RM2,000, effective June 2027, a move that will benefit more than four million workers.

Anwar said MSMEs with annual sales below RM50 million would be exempted from implementing the new rate to allow them time to adjust their business models.

-- BERNAMA