MEF opposes annual pay hike proposal

The Malaysian Employers Federation (MEF) has expressed disagreement with the proposal to make annual wage increments mandatory under a planned progressive wage model (PWM).

The proposal was initially hinted by Economy Minister Rafizi Ramli, who described it as one of the most "unpopular" policies that he would implement as policymaker.

"It is perhaps the most unpopular thing I have ever undertaken in my job as a minister because nobody (employers) will be happy, especially the (senior) lawyers because... nobody wants to raise wages," he said as quoted by Malay Mail.

Commenting on the proposal, MEF president Datuk Dr Syed Hussain Syed Husman said the economy minister should not be making salary increment mandatory under the PWM.

"Malaysia is an open economy and not state owned which is an important factor for the economy minister to understand," Syed Hussain said as quoted by The Star.

The MEF president also emphasised the need for an adequate foundation before the PWM is implemented, noting that it needs to get the approval from all stakeholders and should be premised on clear parameters.

"The payment of higher wages under PWM is linked to performance and productivity and the cost increases associated with payment of higher wages come from the increased revenue and profits from increased productivity and performance," Syed Hussain said.

Economy Ministry's involvement in wage policy

Meanwhile, the MEF also questioned Ramli's involvement on wage-related policies.

"The economy minister mentioned that his team is studying a proposal to Cabinet. The MEF wonders what this plan is when the industry has not been involved in the detailed discussion of this plan," Syed Hussain said.

"We have an able human resources minister who understands what the industry needs and has done much to engage businesses, unions, and employees to come up with policies on what is best for the labour market."

Ramli responded saying the Economy Ministry is working with the Human Resources Ministry in preparing policy options that will be presented to the National Economic Action Council (NEAC).

"The details and mechanism of the final policy will be decided based on comprehensive considerations, including affordability and cost implications for the private sector, sequencing of implementation, and mutual agreement between the government, employers, and employees," he said as quoted by Bernama.

HR Minister V. Sivakumar also came to Ramli's defence, underscoring that the official is also a member of NEAC.

"The wage issue is indeed under the jurisdiction of the Ministry of Human Resources. Rafizi, as the minister of economy, has the right to state what is good for our country," Sivakumar said as quoted by Bernama.

"In addition, we are both members of the NEAC. We will discuss what is the best mechanism for our country."

Sivakumar added that the government has not yet decided on its wage policy and is also looking at other salary models.

"Progressive wage is a good model but we need to look at it in a holistic manner," he said.