Progressive wage pilot project to run at least one year, says minister

KUALA LUMPUR, June 6 — The pilot project for the Progressive Wage Policy is expected to run for at least one year, Human Resources Minister Steven Sim Chee Keong said.

He said the ministry would evaluate and adjust the pilot project in September, focusing on registration procedures and feedback from participants and stakeholders.

“I don’t want to put the cart before the horse and say we’ll stop after one year. Our intention is to continue the Progressive Wage Policy as a mechanism to improve wages for workers in Malaysia

“Even if this pilot project stops, the wage rates set in the conditions are reasonable and sustainable. Most importantly, we want to see the success of this policy as part of our efforts to increase workers’ wages,” he said during the Town Hall meeting on the pilot project here today.

The pilot project is being conducted ahead of the full implementation of the Progressive Wage Policy, which aims to raise wages and achieve a more balanced income distribution.

The Progressive Wage Policy is part of the government’s commitment to reforming the labour market, aiming to increase workers’ incomes in line with productivity gains.

The government targets the participation of 1,000 companies across five sectors in the pilot project -manufacturing, construction, wholesale and retail trade, repair of motor vehicles and motorcycles, information and communication as well as professional, scientific and technical activities.

Sim said to date, about 500 employers have registered and applied for participation in the pilot project since registration opened on June 1, adding that the ministry will soon decide following internal evaluations for employers to join the project.

Based on registered employer statistics from the ASSIST PERKESO portal until May 29, 2024, around 290,659 employers are eligible to apply for cash incentives under the Progressive Wage Policy. This covers an estimated 6,335,971 formal sector workers earning between RM1,500 and RM4,999 per month.

Regarding subsidies for employers participating in the pilot project, Sim emphasised that it’s essential for employers to understand that these subsidies are not a long-term solution to wage issues. Instead, they are aimed at helping companies to be more competitive.

“We provide subsidies or assistance to help our small and medium-sized enterprises (SMEs) thrive.

“When they offer higher wages under the Progressive Wage Policy subsidy, they’ll attract skilled workers, boosting productivity. This growth allows them to sustain competitive wages and create job opportunities even without subsidies,” he said.

Employers seeking more information on guidelines for implementation and registration for these incentives can visit https://www.gajiprogresif.gov.my/ — Bernama