Proposed minimum wage based on sectors a step backward, say employers

KOTA KINABALU: The proposed setting of minimum wage based on sectors is a step backward, according to Sabah Employers Association (SEA).

In a statement yesterday, the association said that when minimum wage was standardised in 2013, it was to do away with the differences across several sectors.

It was also to fulfil the fundamental universal principle - that all employees must be guaranteed equal basic benefits for transportation, accommodation and food.

It is on this principle that minimum wage was standardised along one country, one rate at RM1,100 per month beginning January this year, even though employers across different states face differing levels of business costs and market potentials, said SEA.

“Perhaps, the minister meant allowing different sectors to set minimum start work wage levels ‘higher’ than the basic RM1,100 per month, according to differing productivity levels.

“That would be akin to replacing the free market mechanism, which should be better left undisturbed,” the association said.

The statement further said that a study done by SEA in July 2018 highlighted the following sectoral minimum wage findings:

1. Only 37 out of 208 countries that had implemented minimum wages set them according to sectors;

2. Every sector has many subsectors; breakdown to which sector category are the sectoral differences to be implemented, and on what basis?;

3. Different industry has different productivity and different labour requirements (local vs foreign, skilled vs unskilled), the minimum wage variation will create unnecessary implications that are difficult to quantify nor contain.

“In short, we should not be taking one step forward and two steps back. Rather, (we should) be more inclusive in devising minimum wage, ensure only real feedback are collected instead of rubber stamping federalcentric organizations’ objectives. Minimise unnecessary shocks to the present otherwise jittery market situation, and avoid situations in the past whereby end results are dependent on various sectoral lobbying power,” the association said.

Human Resources Minister, M. Kulasegaran, said, his ministry is looking into introducing sectorbased minimum wage to replace the standardized minimum pay of RM1,100 nationwide.