PETALING JAYA: For small companies, which have just about one month to implement the RM1,500 minimum wage, there seem to be a wide range of problems still besetting them.
Associated Chinese Chambers of Commerce and Industry of Malaysia’s (ACCCIM) SMEs committee chairman Koong Lin Loong said they were facing problems like rising costs of raw materials, unpredictable currency rates, a lack of cash flow and difficulty hiring workers.
Micro-sized SMEs, he said, had to deal with a 20% to 30% increase in raw material prices and a 20% rise in operating costs.
“We want the minimum wage adjustment to be implemented regionally instead of defining it by the number of workers in each company,” he said.
Otherwise, he said these micro-SMEs would face difficulties in hiring workers, who would pick a higher paying job.
Malaysia raised its minimum wage from RM1,200 to RM1,500 starting in May last year. The deadline to do so for small businesses with fewer than five workers was deferred to Jan 1 this year. It was later pushed again to July 1.
Koong said some microenterprises in the Klang Valley, Penang and Johor were already offering salaries above RM1,500.
“But the minimum wage is a burden on microenterprises in Sabah, Sarawak, Terengganu and Kelantan,” he said.
Malay Chambers of Commerce Malaysia (MCCM) president Norsyahrin Hamidon said the government should postpone the minimum wage ruling for another year for enterprises with fewer than five employees.“This is a chicken and egg situation – businessmen require business, which requires political stability and a good economy. Only then these businesses can profit and pay higher wages,” he said.
As for suggestions from labour groups to raise the minimum wage again and calls for companies to contribute 20% to the Employees Provident Fund (EPF), Norsyahrin said one million workers from micro, small, and medium-sized enterprises (MSMEs) might lose their jobs if bosses have to pay a higher EPF contribution.
“Most of Malaysia’s 920,000 businesses are SMEs. If the EPF contribution is raised to 20%, companies may consider switching from keeping permanent staff to hiring contract employees whom they need not pay EPF for,” he said.
SME Association of Malaysia president Ding Hong Sing said instead of raising the minimum wage again, he suggests that the government assist MSMEs as employees in bigger towns currently earn more than RM1,500 per month, plus overtime and allowances.
“Furthermore, the minimum wage benefits only foreign workers, not local employees,” he said.
Micro enterprises, he said, should be given a buffer period.
“Any adjustment to policies should be discussed with the chambers of commerce,” he added.
