KUALA LUMPUR – Subsidies to employers to facilitate the progressive wage policy are not long-term solutions, said Human Resources Minister Steven Sim.
The salary subsidies are meant to help employers attract skilled workers, after which small and medium enterprises (SMEs) are expected to become more productive and be able to pay higher wages, he explained.
The government also wants to build resilience among SMEs through the policy and business owners should not assume they have a “right” to such incentives.
“Even if the (progressive wage) policy is implemented comprehensively (following an assessment scheduled to take place in September), we don’t want employers to see the subsidies provided as being a long-term solution,” Sim told a press conference today after a town hall session on the policy’s pilot project.
“(Government aid) is there to help SMEs be more competitive. Once they can secure more competent, productive and skilled workers by offering a competitive salary, their businesses will grow and they will be able to provide progressive wages even without subsidies.
“Don’t look at subsidies under the progressive wage policy as a long-term right. It’s a short-term solution to help companies be more competitive,” he added.
About 500 companies have registered online to be part of the policy’s pilot phase and Sim urged businesses who qualify for the financial aid to join the initiative, which kicked off this month and will run until August.
Approval for companies who have confirmed their participation in the project, which is executed in collaboration with the Economy Ministry, will be granted within the coming weeks, Sim added.
“In September, we’ll evaluate our findings from the pilot project and see whether any adjustments or streamlining measures are needed (for the policy).
“We want to see the progressive wage policy succeed in raising employees’ wages (through) at least a one-year implementation period, (but) let’s not put the cart before the horse and say we’re going to stop after one year.
“The government’s aim is to continue to policy as one of the mechanisms to improve salary rates.”
It was previously reported that the ministry is targeting for the pilot project to benefit 1,000 companies and an estimated 1.05 million workers nationwide, with RM50 million allocated for the initiative.
Meanwhile, the minister said internal strife within the Malaysian Trades Union Congress (MTUC) could potentially impact the National Wages Consultative Council’s efforts to discuss preliminary findings of the pilot project.
“The council is expected to meet this month in a session involving representatives from the government, employers and employees to discuss the suitability of the research paper which will be brought to the cabinet.
“(The discussion) will require one or two meetings, but I’m pushing for the first meeting to be conducted as soon as possible.
“A constraint we might be facing now is MTUC’s internal struggle, which has presented issues regarding their council membership.”
Sim, however, assured that the matter is being addressed and expressed confidence in the meeting taking place sometime this month.
Previously, MTUC secretary-general Kamaru Baharin Mansor said the congress had unanimously decided to withdraw its appeal against a court ruling declaring its previous triennial conference null and void, thus hinting at an end to the longstanding turmoil within the group. – June 6, 2024