The government has agreed to exempt micro, small and medium enterprises (MSMEs) from the new minimum wage increase for now, citing pressure from rising operating costs and current economic challenges.
Entrepreneur and Cooperatives Development Minister Steven Sim said the Cabinet agreed that wages should continue to rise while taking into account the financial capacity of smaller businesses.
Instead of imposing the new minimum wage on MSMEs at this stage, the Government will support wage increases through other measures, including wage subsidies under the Progressive Wage Policy.
Sim said the approach was intended to ensure wage increases move in line with productivity while allowing MSMEs to remain competitive and continue creating jobs.
“The Government will take another approach to help increase workers’ wages in the MSME sector, including wage subsidy support under the Progressive Wage Policy, so that wage increases move in line with increased productivity,” he said in a statement on Wednesday.
The decision was made during the Cabinet meeting after Sim raised the minimum wage issue for discussion.
Sim said the Government remained committed to improving workers’ welfare through more appropriate wages while ensuring MSMEs could continue to grow and generate employment.
