EMPLOYERS will face real-time monitoring of their minimum wage compliance under a new e-wages system to be introduced in June 2027, when Malaysia’s proposed minimum wage rises from RM1,700 to RM2,000 a month.
Human Resources Minister Datuk Seri R. Ramanan said the system would feature a live dashboard to monitor employers’ compliance, help ensure workers are paid on time and improve the government’s access to wage data across occupations.
More than four million workers are expected to benefit from the increase, but the number of skilled workers who would qualify under categories one to eight of the Malaysia Standard Classification of Occupations (MASCO) could not yet be established because of gaps in available data.
“This is precisely why we need e-wages. The system will help us obtain the necessary data,” he said at a media conference today.
Ramanan said the government would exempt micro, small and medium enterprises (MSMEs) with annual sales below RM50 million to give them time to adjust to the higher wage floor.
However, companies would be assessed based on their overall group turnover rather than the revenue of individual subsidiaries, he said.
“For example, if a subsidiary belongs to a holding company or parent company, we must assess the entire group. The company will therefore be evaluated based on its overall tax and income classifications. Its total turnover will be taken into account rather than assessing each entity individually,” he said.
The government would also encourage smaller businesses to adopt the RM2,000 minimum wage voluntarily.
Separately, the ministry is preparing a starting basic salary framework of RM2,500 a month for graduates and semi-skilled workers, with benchmarks based on qualifications, skills and job responsibilities.
The initial guidelines for graduates will cover MASCO categories one to three, including degree and diploma holders and individuals with specified Malaysian skills qualifications. For semi-skilled workers, the framework will align with existing guidelines for holders of Malaysian Skills Certificates (SKM) Levels 1 and 2.
The guidelines are targeted for publication alongside the new Minimum Wages Order in June 2027, with starting salary benchmarks updated using the latest data from the Department of Statistics Malaysia and published through the e-MASCO portal.
Ramanan said the government also intended to amend the National Wages Consultative Council Act 2011 (Act 732) to include educational qualifications as a factor in determining minimum wages, potentially enabling mandatory minimum wage rates for graduates in the future.
“This change is necessary because the current Act does not specifically provide for minimum wages based on educational attainment,” he said.
The reforms are intended to reduce wage compression and ensure pay better reflects the skills and qualifications required for different occupations.
Under the 13th Malaysia Plan, the government aims to raise the median salary to RM3,500 and increase employees’ compensation to 40% of gross domestic product by 2030.
Ramanan said the proposed wage increase had been assessed against economic conditions to ensure businesses could absorb higher labour costs without excessive pressure or significant inflationary effects.
The National Wages Consultative Council had reviewed data from various ministries and industry players before reaching its decision, he added.
The ministry is also working to expedite the necessary legal measures, with implementation targeted before June 2027. - October 16, 2026