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Malaysia: Minimum wages for all

14 February, 2013Malaysian trade unions and civil society called on the Malaysian government to withdraw the recent cabinet decision that allow the employer to deduct from the migrant workers’ wages of the amount employer paid to the government to employ foreign workers.

In July 2012 the Malaysian government announced that workers in Malaysia would receive minimum wages of RM 900[USD291] (for Peninsular Malaysia) and RM800 [USD259] (for Sabah and Sarawak). The announcement came into force from 1 January 2013. The minimum wage is a basic wage excluding overtime, existing allowances and other benefits. However, to avoid paying minimum wages some employers calculate other benefits as part of minimum wage and some force workers to sign that they received minimum wages, while actually paying them less.

As large number of workers work on short term-employment contracts, with the fear of non-renewal of contract, they do not speak for their rights. In addition the Malaysian Government through its Minimum Wages (Amendment) Order on 28 December 2012, allowed employers to apply for the right to be exempted from paying the minimum wages. Through this more than 500 employers got the right to delay paying the minimum wages. However, in this process the government did not provide space for the involvement of workers or their trade union before processing the application of employers.

In case of levy on foreign workers, the government earlier allowed employers to deduct from wages of the foreign workers to recover expenses made by the employer for employing the foreign worker including the levy paid to the government. However, the government stopped this practice from 1 April 2009. Once again on 30 January 2013 the Malaysian cabinet decided to allow employers of migrant workers to recover the levy they pay the government by deduction of wages of migrant workers.

In a joint statement released on 5 February 2013, trade unions and civil society activists expressed serious concern that the government’s move towards reintroducing the provision would merely shift the burden on to migrant workers. In an appeal to the Malaysian government, 75 civil society organizations and trade unions across the world stated, “that all workers, including migrant workers, are entitled to receive minimum wages, whereby this is the basic wage and should not include allowances, benefits and other work incentives. Employers should not be permitted to remove pre-April 2012 worker entitlements and benefits, being the date the Minimum Wage Order 2012 came into force, from existing and subsequent employment contracts.”

They called on the Malaysian government and to immediately withdraw the decision made by the Malaysian cabinet and end all forms of discrimination against workers.