BUSINESSES with annual sales below RM50 million will be exempt from the RM2,000 minimum wage requirement when it takes effect in June 2027, as the government seeks to limit the risk of retrenchments and contain cost pressures on employers.
Economy Minister Akmal Nasrullah Mohd Nasir told the Dewan Rakyat today the increase from RM1,700 was expected to benefit more than four million workers, while the exemption would give eligible micro, small and medium enterprises (MSMEs) time to adjust their business models and finances.
MSMEs employ 8.09 million people, or 48.7 per cent of Malaysia’s total workforce, according to the minister’s written reply to Sri Gading MP Aminolhuda Hassan in the Dewan Rakyat today.
Akmal said the new Minimum Wage Order would be enforced by the labour departments in Peninsular Malaysia, Sabah and Sarawak under the National Wages Consultative Council Act 2011.
Workers may lodge complaints over non-compliance, while employers who breach the law could face fines or imprisonment under Section 43 of the Act.
Workers retrenched as a result of corporate restructuring may also claim benefits under the Employment Insurance System (EIS), including the Job Search Allowance for up to six months, subject to eligibility requirements.
On concerns that higher wages could drive up prices and living costs, the ministry said inflation had remained relatively stable despite previous minimum wage increases.
Inflation eased to 1.4 per cent in 2025, from 1.8 per cent in 2024 and 3.3 per cent in 2022. It stood at 1.7 per cent in the first quarter of 2026 and around 1.9 to 2.0 per cent in the second quarter.
Food and beverage inflation was 1.4 per cent in May and June, rising to between 1.8 and 1.9 per cent in July and August.
The minister cited gross domestic product growth of 5.4 per cent in the first quarter of 2026 and 6.0 per cent in the second quarter, saying the figures showed that higher wages could support domestic demand without undermining price stability.
“To guard against unjustified price increases, the government will strengthen enforcement under the Price Control and Anti-Profiteering Act 2011, manage strategic supplies and expand Rahmah MADANI Sales programmes,” he said.
A total of RM700 million will be allocated for 30,000 targeted sales programmes in rural areas, low-cost housing neighbourhoods and urban People’s Housing Programme (PPR) schemes.
Another RM50 million will fund 5,000 Agro MADANI Sales programmes nationwide, offering fresh produce and other food items, including chicken, fish, vegetables and fruit, at prices 10 to 30 per cent below market rates.
The ministry said the National Cost of Living Action Council would continue monitoring and implementing measures to address pressure on household budgets. - October 13, 2026