ONG Kian Ming wants the government to be more comprehensive in its approach to introducing the minimum monthly wage of RM1,500 in May, and has given eight suggestions.

The former international trade and industry deputy minister said the suggestions could be made part of the country’s labour market reforms policy and would help smaller firms that will face a huge jump in their operation costs.

Ong suggested that the government introduce these measures:

· consider lower minimum wages in non-city areas with a lower cost of living,

· consider setting minimum hourly wage rates in addition to the minimum monthly wage rate,

· reopen the labour market immediately to bring in foreign workers,

· allow only companies to hire foreign workers directly,

· ensure companies that bring in new foreign workers provide proper accommodation quarters to these workers,

· allow refugees with UNHCR cards to work,

· waive the condition that vacancies for expatriate-level jobs – EP1, EP2 and EP3 – must be advertised through MyFutureJobs for 30 days, and

· consider wage subsidies for smaller companies.

Prime Minister Ismail Sabri Yaakob announced the new RM1,500 minimum wage at the Umno general assembly and said that it would begin on May 1.

On the lower minimum wages in non-city areas, Ong said many small firms in the rural areas in Pahang, Kelantan, Terengganu, Sabah and Sarawak, could probably not cope with the sudden increase in the minimum wage from RM1,100 to RM1,500.

He suggested a lower minimum wage of RM1, 400 should be considered for these areas.

He said when the Pakatan Harapan (PH) government increased the minimum wage from RM1,100 to RM1, 200 effective January 1, 2020, it applied to only 57 towns and cities across the country but left the minimum wage in the non-city and town areas at RM1,100.

On having the minimum hourly wage rates, Ong said it is “to give the choice to employers to choose between a monthly minimum wage of RM1,500 or a minimum hourly rate of RM7.80 an hour”.

“Small companies which may not be able to afford this sudden jump in the minimum wages would then have the option of adjusting the number of hours worked per employee to keep their businesses sustainable.”

Ong reiterated the government must reopen the labour market to foreign workers and immediately start using the multi-tiered levy system in a transparent and open manner.

He said many companies are willing to pay their workers a higher salary, but they are only able to adequately cover the costs of these salary increases if they were allowed to hire some foreign workers for their business operations.

“Many manufacturers are not able to fulfil their order books, especially in the electrical and electronic (E&E sector), and as such, many have also had to turn away profitable orders from overseas because of the shortage of workers.”

He said palm oil growers are also suffering the same predicament in not having sufficient workers to collect the fresh fruit bunches (FFBs) at a time when crude palm oil (CPO) prices are high.

Ong said rather than taking on the burden of deciding how many foreign workers to approve for each company, the government should immediately implement the multi-tiered levy system by industry sector.

He said if a company wants to hire more foreign workers, it therefore has to pay a progressive higher levy.

Ong said the government could look into the proposal the previous PH government had drawn up.

“Such a policy will also allow the government to earn some much-needed revenue from employers.”

Ong also said the reopening of the labour market to foreign workers would not have any significant impact on the unemployment rate among Malaysians since many of the jobs have not and cannot be filled currently by Malaysians.

The Bangi lawmaker also suggested allowing companies to hire foreign workers directly rather than going through foreign worker “agents” or employment agencies.

He pointed out that under the current policy, it opens up the possibility that many companies would push the responsibility of taking care of the workers to the employment agencies rather than taking on  the responsibility themselves.

“When this happens, these companies, including some multinationals, can plead ignorance if foreign workers working at their premises are not treated properly since they can always shift the blame to the employment agencies.” – March 22, 2022.