KUALA LUMPUR – The cash incentives for employers under the progressive wage model (PWM) are RM200 per month for entry-level employees, and RM300 a month for existing workers.
These payments are for one year, and on the condition the companies involved in the PWM have adjusted their workers’ salaries in accordance with the recommended annual salary increase guidelines set by a special committee, according to the White Paper on the PWM.
The paper was tabled in the Dewan Rakyat today by Economy Minister Rafizi Ramli.
Salary increments made before participation in the PWM will not be taken into account, the paper added.
The annual salary increase guidelines will be in accordance with the Malaysia Standard Classification of Occupations (Masco), which is the national benchmark for the classification of occupations.
The guidelines will be ready next year for the PWM’s pilot phase that will run from June to September 2024.
The increments will be determined by a working committee in charge of setting salary increment guidelines in consultation with employers and unions. The committee will be led by the Human Resources Ministry and comprise officials from the Statistics Department, Bank Negara, National Wages Consultative Council, Higher Education Ministry, and research institutes.
The working committee’s proposal for salary increments will be sent to a cabinet committee in charge of implementing the PWM, for tabling to the cabinet for approval.
The cash incentive for employers will begin from the date of employment for entry-level workers, and in the case of existing employees, from the date that their salaries are adjusted in accordance with the annual salary increase guidelines.
The incentives will also be given on a ‘first come, first served’ basis as the PWM is voluntary.
Companies participating must fulfil documentation requirements to prove that they have raised salaries in accordance with the guidelines, and also allow themselves to be audited.
At a press conference after tabling the White Paper, Rafizi said RM30 million has been allocated by his ministry for the initial implementation of the PWM.
The pilot phase will target 1,000 small-and-medium companies (SMEs) with employees earning a salary between the minimum wage of RM1,500 and RM4,999.
The number of workers earning within that salary range is about 4 million people or 66% of the workforce. Non-Malaysian workers will not be eligible for the PWM.
Rafizi, at the press conference, said he was not worried about under-subscription to the programme but rather that demand would be overwhelming.
The PWM aims to address Malaysia’s long-standing problem with stagnant or slow wage growth, as well as to reform salary structures in the private sector.
Although voluntary, the government is hoping that widespread adoption will eventually produce competitiveness and see wide changes in wage growth across the board.
The PWM will also be linked to productivity, with participating employers required to prove that their workers have completed government-recognised skills training courses. – November 30, 2023