600 firms in Malaysia get to defer minimum wage

PUTRAJAYA - Some 600 companies have been granted an extension to the grace period ahead of the implementation of minimum wage next year.

Most of them would get an extension of between three and six months from the deadline, Human Resources Minister Datuk Seri Dr S. Subramaniam said.

"Some of these companies have been making losses consecutively for two to three years," he said after chairing the National Labour Consultative Council meeting here.

He said the companies submitted their accounts to the consultative council, which decided to give them a breather to restructure their operations.

Malaysia will implement the minimum wage rule starting Jan 1 for big companies and on July 1 for small and medium enterprises.

The new rule, which had been a point of contention between employers and workers' unions for at least two decades, will require companies to pay a minimum wage of RM900 (S$360) in the peninsula and RM800 in Sabah, Sarawak and Labuan.

Subramaniam noted that the number of companies granted extensions was small compared to the total number of applications, which was about 4,200 companies of various sizes and sectors.

"Those granted extensions only account for a small number of all who applied. They will know the results of their applications within a week," he said.

On the possibility of granting an extension to the deadline for the private sector's new retirement age of 60 which is slated to come into force in the middle of next year Subramaniam declined to comment, saying only that an "announcement will come".

When asked about the ongoing negotiations over the hiring of Indonesian maids, Subramaniam said top officials from his ministry and Indonesia were expected to hold another joint task force meeting within the next two weeks.

He repeated Malaysia's stand that the new agent fees which he claimed was put at around RM12,000 by maid agencies was too high and needed to be at a more affordable figure.

To another question, Subramaniam said there had not been any formal discussion on the possibility of a government-to-government (G2G) arrangement on the hiring of Indonesian workers in Malaysia, as had been done between Malaysia and Bangladesh.

"I read a statement by the Indonesian minister in a newspaper that they are considering G2G, but the move will have legal implications on them their laws have to be changed to do that.

"If they are prepared to do it, then we will talk to them about it positively because G2G involves both governments having a system which is strong and effective to make sure it works," he said.