MPs voice support, concerns over minimum wage increase

KUALA LUMPUR: The government’s decision to raise the minimum wage from RM1,500 to RM1,700 was among the focus for both government and opposition MPs during the debate on the Supply Bill 2025 in the Dewan Rakyat on Wednesday (Oct 23).

Most of them supported the move as it would benefit the workers, but some expressed concerns about the potential burden on employers and the risk of a ripple effect on the cost of living, including higher prices for goods and services.

Teresa Kok Suh Sim (PH-Seputeh), who backed the decision, said the government needs to consider the challenges faced by employers who must bear the wage increase while also contributing to the Employees Provident Fund (EPF) for foreign workers.

She proposed that employers contribute 1.5 per cent to the EPF for their foreign workers while the workers themselves contribute 10 per cent.

“Under the current EPF system, employers pay 13 per cent and employees contribute 11 per cent. If this same rate applies to foreign workers, it could place an extra burden on employers, who already bear other costs like accommodation,” she said during the debate.

She added that EPF contributions for foreign workers could prevent them from running away and curb syndicates exploiting foreign labour while also helping workers build up their savings.

Prime Minister Datuk Seri Anwar Ibrahim, when tabling Budget 2025 last Friday (Oct 18), announced that the minimum wage will be raised from RM1,500 to RM1,700 a month, effective Feb 1, 2025.

For employers or small businesses with five or fewer employees, the new wage will take effect on Aug 1, 2025.

Meanwhile, Tan Sri Muhyiddin Yassin (PN-Pagoh) said that workers would undoubtedly welcome the wage hike, while employers who can absorb the higher labour costs could help increase the contribution of employee compensation to Gross Domestic Product (GDP).

He said the minimum wage increase must be accompanied by clear price control policies and strengthened enforcement under the Price Control and Anti-Profiteering Act 2011 to ensure strict action against unjustified price hikes.

“Enforcement needs to be more effective and widespread. The government must also exercise caution in implementing policies that could trigger a chain reaction on price increases for goods and services,” he said.

Datuk Wan Saifulruddin Wan Jan (PN-Tasek Gelugor) described the wage hike as timely but urged the government to consider its impact on small and medium enterprises (SMEs).

He also called for a slight delay in implementation to ensure that all stakeholders are fully prepared and able to adapt to the effects of the wage increase.

“In addition, I urge the Finance Ministry to ensure that all contracts within ministries and government agencies are reviewed to adjust payment rates in line with the new minimum wage,” he said.

The same issue was raised by several other MPs, including Datuk Seri Bung Moktar Radin (BN-Kinabatangan) and Datuk Seri Tuan Ibrahim Tuan Man (PN-Kubang Kerian).

The Dewan Rakyat sitting continues on Thursday (Oct 24).- Bernama