PETALING JAYA: Malaysian Trades Union Congress (MTUC) president Mohd Effendy Abdul Ghani has called for a policy that differentiates salaries based on qualifications, skills and job roles rather than the minimum wage.
“Malaysia should have a wage classification framework to ensure employers compensate workers according to their qualifications and expertise.
“A structured wage scale would prevent the undervaluation of skilled workers and ensure that people are paid fairly for the work they do,” he said.
Mohd Effendy was commenting on the recent increase in Malaysia’s minimum wage from RM1,500 to RM1,700, which he welcomed as a positive step to support low-waged workers.
However, he said the new minimum wage should not be considered fair pay for all workers but merely serve as a basic safety net for those with limited education.
“People with higher qualifications and specialised skills, workers with secondary school qualifications and those with skills certificates or diplomas should earn more than the minimum wage and be paid according to their technical expertise.
“Similarly, bachelor’s degree holders and professionals such as engineers should receive significantly higher salaries to reflect their knowledge and contributions to industry,”
he said.
Mohd Effendy urged the government and employers to create a fair and structured wage system that recognises higher education so skilled employees are not placed under the minimum wage category, as this would discourage young people from upskilling.
He also said with the rise in the minimum salary, strict enforcement is critical to ensure employers adhere to the new law.
“Laws without teeth are merely empty documents, so we need to ensure that every worker receives his rightful wages. Hence, MTUC calls on the Labour Department to act against employers who fail to comply with the new wage rule.”
While the wage increase has many benefits, such as boosting consumer spending, he warned that the policy may result in wage compression, where workers
with varying skill levels receive similar pay.
“Wage compression could discourage workers from pursuing higher education or acquiring more skills, so I wish to emphasise the need for additional incentives, such as government-subsidised training programmes to help workers upgrade their skills and move into higher-paying roles.
“Employers must also establish career progression pathways that include salary increments for those who gain additional skills or qualifications. Performance-based wage systems should be introduced to reward workers who acquire them,” he said.
Universiti Sains Islam Malaysia human resources and development lecturer Assoc Prof Dr Abdul Rahim Zumrah said while the minimum wage increase is a positive move to help workers cope with the rising cost of living, companies must adapt to changes.
“From the company’s perspective, the new policy will increase salary costs, so businesses may adjust employment contracts or explore alternatives such as hiring contract workers or outsourcing non-core roles like security or transport.”
However, he stressed that despite these adjustments, employee welfare must remain the priority and as employees are the backbone of any company their well-being should always come first, regardless of salary changes.
The increase in the minimum monthly wage to RM1,700, up from RM1,500, took effect on Feb 1, benefiting a total of 4.37 million workers following official implementation of the minimum wage order.
For businesses with fewer than five employees, the new rate will take effect on Aug 1, allowing time for necessary adjustments in wage structures and operations.
Employers must also comply with the new order to ensure their workers receive at least RM1,700 per month.
Non-compliance is an offence under the National Wages Consultative Council Act 2011 (Act 732) and may result in penalties.
