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MPMA Participated in MEF’s Meeting With Industry Organisation to Discuss the RM1,500 National Minimum Wage as Announced by YAB PM as well as the Multi-Tier Levy that is being Considered by the Government

Summary of the meeting on the increased Minimum Wage (MW) of RM1,500 includes the following:

1. GLCs and MNCs/Large Corporations - MW at RM1, 500 from 1 May 2022 as decided by the government.
2. For SMEs - to propose that there would be no increase for 2022 Agiven the current challenging conditions for these companies. There would be increments starting from 2023 at RM100/year from the current rate.
3. To expand and standardise the definition of what constitutes "basic wages”, to allow for allowances, etc to form part of basic wages.
Summary of the meeting on the Multi-Tier Levy System include the following:
1. Tiered levy payment should be based on the total number of employees instead of the total number of applications of foreign workers.
2. Upon the introduction of a tiered levy, the quota system for the approval of the number of FW should be rescinded. Companies should be allowed to employ any number of FWs, subject to the companies paying the respective levy at each tier.
However, for companies that are classified as predominantly export oriented, and which are currently allowed a 1:3 quota, it is proposed that this quota shall remain as an incentive to encourage exports, and as an incentive to attract FDIs. The rate for the levy shall be a single (not tiered) rate based on the existing rate.
3. To plough back part of the levy for training and upskilling which is required to reduce the dependency of foreign workers.
Other Matters:
There was a recent statement by the Minister of MOHR which stated that only 0.55 % of the FW applications submitted since 15 February 2022 have been approved. This means that the processing of these applications have been excruciatingly slow, with more than 470,000 applications still being processed.
An appeal will be made for the process to be expedited given the severe shortage of workers faced by all industry sectors.

MEF
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