Malaysia: Minimum Wage Order for employers with less than five workers postponed to 1 July 2023

published on 11 January 2023 | reading time approx. 1 minute

We previously wrote about the amendments of the Minimum Wages Order 2020 and the announcement by the Prime Minister of Malaysia that the national minimum wage will be revised to RM1,500 per month, which has been gazetted under the Minimum Wages Order 2022 (“Order”) on 27 April 2022.

A temporary exemption was provided for employers with less than five employees until 31 December 2022. However, this exemption does not apply to employers carrying out professional activities regardless of the number of employees. The classification of professional activities has been provided under the Malaysia Standard Classification of Occupations published by the Ministry of Human Resources.

On 27 December 2022, the Human Resources Minister announced that a further extension is granted for employers with less than five workers. Employers with less than five workers have until 1 July 2023 to comply with the Order.

Employers having five or more workers will have to continue paying the minimum wage of RM1,500 per month.

Employers should be prudent in complying with the Order as failure to pay minimum wages as specified in the Order does constitute an offence under Section 23 of the National Wages Consultative Council Act 2011. Upon conviction, the employer shall be liable to a fine of not more than RM10,000 for each employee.