22/10/2024
🇲🇾Labour-intensive sectors most affected by minimum wage increase
👉Although the minimum wage will only increase by RM200 per worker per month, the hike will affect labour-intensive sectors such as plantation, construction, manufacturing and rubber gloves, with the extent of the impact varying depending on the industry.
💰Bosses will also have to shell out more cash once the government plans to make contributions to the Employees Provident Fund (EPF) mandatory for all non-citizen workers in phases. Under the new RM1,700 minimum wage, employers will have to bear an additional RM221 cost per worker per month.
👉Currently, for employees earning less than RM5,000 per month, their bosses must contribute 13% of their wages to the EPF.
⭕The EPF confirmed yesterday that 2 million foreign workers will benefit from mandatory EPF coverage. The mechanism is still being worked out. As for the new minimum wage, it will take effect on February 1, 2025. For employers with fewer than five workers, the effective date is postponed to August 1, 2025.
⭕While Industrial Bank acknowledges that a higher minimum wage will translate into an increase in disposable income, this will be offset by the inflationary impact of companies passing on higher costs.
