With the white paper on the Progressive Wage policy already being shared by the Economic Ministry, the much-anticipated program by the government that is set to raise the income level of workers is about to be pilot-tested.
Economic Minister, Rafizi Ramli has announced that under the voluntary program, the Federal government will offer employers who adopt the progressive wage policy up to RM200 as a monthly cash incentive for entry-level workers they hire and RM300 for non-entry level for 12 months.
Economy Minister Rafizi Ramli said the policy, which will be implemented starting in the middle of next year, will target workers earning more than Malaysia’s current minimum wage but under RM5,000 a month.
The policy which is adopted from a model similar to Singapore, will encompass three fundamental features, including voluntary implementation, incentive-based structure, and direct correlation to productivity.
“The proposal considers the 66.6 percent of total workers (accounting for some four million individuals) who fall within the monthly salary range of RM1,500 to RM4,999.
“This proposal ensures broad coverage, allowing a substantial number of private workers to benefit from the initiative,” he said in the Dewan Rakyat when tabling the white paper for the policy today.
Rafizi said companies registered for the programme must also send eligible employees for training and upskilling courses.
In return, employees are expected to demonstrate increased productivity in line with their higher pay, as salary hikes are typically linked to the employee’s productivity and skills development.
The progressive wage policy’s implementation is set to commence in June 2024 with a pilot project involving 1,000 companies.
The participating companies involve those in micro, small, and medium enterprises.
“Companies will be selected based on criteria emphasising policy support, sector needs, and equality.
“A thorough impact assessment will be done to evaluate the pilot project’s effectiveness and the policy’s viability before its full implementation,” he said.
Rafizi added a special committee will be set up to annually review the proposed increments rates, taking into account factors like the economic sector and job role.
