EMPLOYERS were prepared to implement the progressive wage policy, with a pilot project due in June this year, but said loose ends must be tied up, the Malaysia Employers Federation (MEF) said.

MEF president Syed Hussain Syed Husman said higher wages based on the increase of productivity among workers would draw more investors to the country.

He said productivity growth must be increased first, with the cost borne by employers, so to offset the extra burden, the government must cover the cost for upskilling and reskilling before employees could be paid more.

“The (progressive wage) policy is not only about adjusting wages that will be commensurate with work performance, productivity, skills and experience, but will also ensure employers improve productivity and profits while consumers get better products and services at affordable prices.

“Under the progressive wage model, as employees acquire certified skills, gain more experience and show improved job performance and productivity, they will be eligible for higher wages,” he said.

Syed Hussain said the implementation of the policy, which involves an allocation of RM2 billion as a subsidy to volunteer employers, must be streamlined to ensure better understanding and attract more employers to participate in the programme.

“It is not clear how the subsidy will be allocated and the government has not determined the minimum rate of increment to be eligible for the subsidy. MEF is of the view that the subsidy on annual increment should not be limited to 12 months,” he said.

Though he applauded the government’s move to introduce the progressive wage policy, Mydin Mohamed Holdings Bhd (Mydin) managing director Ameer Ali Mydin said the decision not to make the policy mandatory for businesses was the right step.

Ameer said Mydin was ready to implement the progressive wage policy, with the hypermarket having identified 7,000 employees eligible for the benefit.

EMIR Research social, law and human rights head Jason Loh Seong Wei said the policy was fair and balanced as it did not impose on employers, with the government providing cash incentives to supplement the salary increment.

“Not only will participating employers be financially incentivised, the employees will, too, since they are the ultimate (benefactors) of the progressive wage policy.

“This will not only raise productivity in terms of output but also training and development, such as upskilling and reskilling,” he said.

On November 30, the Economy Ministry in a written reply to a question from senator Koh Nai Kwong said about 80% of employers were willing to participate in the progressive wage policy on a voluntary basis if it allowed them to examine their financial capabilities before participating. – Bernama, January 12, 2024.