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Malaysia - Minimum Wages - 2011


LAST UPDATE

4 November 2011

SOURCES


Name of Act

Employment Act, Act 265 of 1955, incorporating all amendments up to 1 January 2006. Published by the Commissioner of Law Revision, Malaysia, under the authority of the Revision of Laws Act 1968, in collaboration with Percetakan Naional Malaysia BHD, on the the Ministry of Human Resources website at http://jtksm.mohr.gov.my/images/pdf/akta/employment_act_1955_bi.pdf and accessed 4 November 2011
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Name of Act

National Wages Consultative Council Act, Act 732 of 2011. Published by Percetakan Nasional Malaysia Berhad and reproduced at http://malaysianlaw.my and accessed 4 November 2011. Under the National Wages Consultative Council Act Appointment of the Date of Coming into Operation, dated 15 September 2011, the Act came into operation on 23 September 2011.

LEGAL DEFINITIONS


Employee/worker

Employee means:
(1) any person, regardless of his occupation, who has entered into a contract of service with an employer under which such person’s wages do not exceed 1,500 ringgit a month; and
(2) any person who, irrespective of the amount of wages he earns in a month, has entered into a contract of service with an employer under which he:
(i) is engaged in manual labour, including as an artisan or apprentice, for more than 1/2 of his total work time during a given wage period;
(ii) is engaged in the operation or maintenance of any mechanically propelled vehicle operated for the transport of passengers or goods or for reward or commercial purposes;
(iii) supervises or oversees other employees engaged in manual labour by the same employer throughout the performance of their work;
(iv) is engaged in any capacity in any vessel registered in Malaysia and who is not an officer or certificate holder, nor subject to an agreement, under the Merchant Shipping Ordinance; or
(v) is engaged as a domestic servant.
Employment Act 1955 §2, First Schedule
National Wages Consultative Council Act 2011 §2
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Employer

Employer means any person who has entered into a contract of service to employ another person as an employee and includes the agent, manager or factor of such first-mentioned person.
Employment Act 1955 §2
National Wages Consultative Council Act 2011 §2
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Wage

Wages means basic wages and all other payments in cash payable to an employee for work done in respect of his contract of service but does not include:
(a) the value of any house accommodation or the supply of any food, fuel, light or water or medical attendance, or of any approved amenity or approved service;
(b) any contribution paid by the employer on his own account to any pension fund, provident fund, superannuation scheme, retrenchment, termination, lay-off or retirement scheme, thrift scheme or any other fund or scheme established for the benefit or welfare of the employee;
(c) any travelling allowance or the value of any travelling concession;
(d) any sum payable to the employee to defray special expenses entailed on him by the nature of his employment;
(e) any gratuity payable on discharge or retirement; or
(f) any annual bonus or any part of any annual bonus.
Employment Act 1955 §2
National Wages Consultative Council Act 2011 §2

Minimum wage

Minimum wages means the basic wages to be or as determined under §23 of the National Wages Consultatuve Council Act 2011.
National Wages Consultative Council Act 2011 §2

MINIMUM WAGE FIXING


Procedure


Government decides after tripartite or bipartite body discussions/recommendations

Under the National Wages Consultative Council Act 2011, the National Wages Consultative Council (NWCC) is empowered to advise the Government on all matters relating to minimum wages and make recommendations to the Government on the minimum wage rates and coverage according to sectors, types of employment and regional areas, and other related matters.

The NWCC shall consist of no more than 29 members at any time, as appointed by the Minister, and shall include:
(i) a Chairman, Deputy Chairman and Secretary,
(ii) at least 5 members from amongst public officers,
(iii) at least 5 members representing the employees,
(iv) the same number of members representing the employers as there are members representing the employees, and
(v) at least 5 independent experts.

Before making a recommendation to the Government, the NWCC must consult with the public on the minimum wage rates and coverage in such manner as the Minister may determine. It must also collect and analyse data and information and conduct research on wages and the socio-economic indicators. These processes must be repeated whenever the NWCC considers, upon review, that an existing minimum wages order needs to be amended.

Upon receiving the NWCC’s recommendation, the Government may agree with it or direct the NWCC to review it and make a fresh recommendation within a specified period. Where a review is ordered, the NWCC must repeat the consultation and information collection and analysis processes mentioned above. If the Government disagrees with the fresh recommendation, it may determine the matters which were the subject of the NWCC’s recommendation.

Once the Government agrees with a NWCC recommendation, or has determined the relevant matters for itself, the Minister shall make a minimum wages order in accordance with that agreement or determination, by notification in the Gazette.
National Wages Consultative Council Act 2011 §§4, 5, 21, 22, 23, 25(4)
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Criteria


Other provisions

No criteria are imposed on the National Wages Consultative Council, beyond requiring that it base its recommendation on the outcome of its process of public consultation and research on wages and socio-economic indicators.

No criteria are imposed on the Government’s decision to agree with a NWCC recommendation or determine the relevant matters independently.
National Wages Consultative Council Act 2011 §§21, 22

Coverage


Scope

The scope of a minimum wages order will be determined by its terms. However, based on the scope of the National Wages Consultative Council Act, a minimum wages order may apply to all employees in Malaysia (i.e. Peninsula Malaysia, Sahab and Sarawak) according to the definition of employee under the relevant general labour legislation (i.e. the Employment Act 1955, the Sahab Labour Ordinance 1950 and the Sarawak Labour Ordinance 1952 respectively).

In Peninsula Malaysia, the potential scope of a minimum wages order is:
(1) any person, regardless of his occupation, who has entered into a contract of service with an employer under which such person’s wages do not exceed 1,500 ringgit a month; and
(2) any person who, irrespective of the amount of wages he earns in a month, has entered into a contract of service with an employer under which he:
(i) is engaged in manual labour, including as an artisan or apprentice, for more than 1/2 of his total work time during a given wage period;
(ii) is engaged in the operation or maintenance of any mechanically propelled vehicle operated for the transport of passengers or goods or for reward or commercial purposes;
(iii) supervises or oversees other employees engaged in manual labour by the same employer throughout the performance of their work;
(iv) is engaged in any capacity in any vessel registered in Malaysia and who is not an officer or certificate holder, nor subject to an agreement, under the Merchant Shipping Ordinance; or
(v) is engaged as a domestic servant.
National Wages Consultative Council Act 2011 §§22(1)(b), 22(1)(c), 23(1)
Employment Act 1955 §2 and First Schedule

Excluded categories


» Workers

A minimum wages order may exclude certain types of employment, persons or classes of persons from its scope.
National Wages Consultative Council Act 2011 §§22(1)(c), 23(1)

» Sectors

A minimum wages order may exclude certain sectors from its scope.
National Wages Consultative Council Act 2011 §§22(1)(c), 23(1)

» Other Provisions

A minimum wages order may exclude certain regional areas from its scope.
National Wages Consultative Council Act 2011 §§22(1)(c), 23(1)

Specific minimum wage rates


» Specific minimum wage by occupation

The minimum wage rates, and commencement of the minimum wages order, may vary between types of employment or classes of persons.
National Wages Consultative Council Act 2011 §22(1)(b), (d)

» Specific minimum wage by sector

The minimum wage rates, or dates of commencement of the minimum wages order, may vary between sectors.
National Wages Consultative Council Act 2011 §22(1)(b), (d)

» Specific minimum wage by region

The minimum wage rates, or dates of commencement of the minimum wages order, may vary between regional areas.
National Wages Consultative Council Act 2011 §22(1)(b), (d)

Level


Minimum wage level(s) in national currency

At the time of writing, no minimum wage had been set under the National Wages Consultative Council Act 2011.
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Last minimum wage update

Ongoing as at 4 November 2011

In-kind allowances

Except as otherwise expressly permitted by the Employment Act, the entire amount of the wages earned by, or payable to, any employee in respect of any work done by him shall be actually paid to him in legal tender, and every payment of, or on account of, any such wages made in any other form shall be illegal, null and void.

Nothing in the Act shall render illegal a contract of service with an employee under which the employer agrees to provide the employee with house accommodation, food, fuel, light, water, medical attendance, or any approved amenity or service (as approved by the Director General) in addition to wages. However, no employer shall provide any employee with any intoxicating liquor as part of the terms of a contract of service.
Employment Act 1955 §§25(1), 29(1), 29(2)

Rate of payment


» Monthly

A wage period shall be set by contract, but shall not exceed one month. Every employer must pay his employees within 7 days of the end of any wage period.
Employment Act 1955 §§18, 19
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Scheduled frequency of adjustment

The National Wages Consultative Council shall review the minimum wages order at least once in every 2 years.
National Wages Consultative Council Act 2011 §25

Enforcement mechanisms


Labour inspection

Enforcement officers, as appointed under the Employment Act 1955, the Sabah Labour Ordinance 1950 or the Sarawak Labour Ordinance 1952, shall have all powers to investigate into any offence under, conduct any inquiry under, and enforce any provision of, the National Wages Consultative Council Act. Enforcement officers exercising such powers shall produce an authority card upon demand.

Where a Magistrate is satisfied that there is reasonable cause to believe that any premises are being used for, or there is in any premises evidence relevant to, the commission of an offence under the NWCC Act, the Magistrate may issue a warrant authorizing a named enforcement officer to enter the premises at any reasonable time, by day or night and with or without assistance (and, if necessary, by force). The warrant may authorize the officer to search the premises and seize, take samples of or make copies of book of account of wages, register, financial statement or other document found in the premises (whether stored in hard- or electronic-form) that is reasonably believed to furnish evidence of the commission of an office.

If an eforcement officer is satisfied that he has reasonable cause to believe that the delay caused by obtaining a search warrant would adversely affect the investigation or allow for the removal or tampering of evidence, the enforcement officer may enter the premises and exercise all powers that may be otherwise granted in a warrant, as if he was so authorised.

Obstruction of an enforcement officer, or failure to provide access to records as directed by an enforcement officer, is an offence.
National Wages Consultative Council Act 2011 §§2, 26, 27, 28, 29, 30, 35, 38

Fines in national currency for non-respect of legislation

An employer who fails to pay the basic wages as specified in the minimum wages order to his employees commits an offence and shall, on conviction, be liable to a fine of not more than 10,000 ringgit for each employee. For other offences under the Act, an employer will be liable to a fine not exceeding 10,000 ringgits.

In the case of a continuing offence, the convicted person shall be liable to a daily fine not exceeding 1,000 ringgits for each day the offence continues after conviction.

For any repeated offence, a person shall be liable to a fine not exceeding 20,000 ringgits (or imprisonment for a term not exceeding 5 years).
National Wages Consultative Council Act 2011 §§43, 45, 46, 47

Other penalties

An employer who is convicted of failing to pay the basic wages as specified in a minimum wages order may, in addition to a fine, be ordered to pay the difference between the minimum wages rate as specified in the minimum wages order and the basic wages paid by the employer to the employee, including the outstanding difference and any other payments accrued.

For any repeated offence, a person shall be liable to imprisonment for a term not exceeding 5 years (or a fine not exceeding 20,000 ringgits).
National Wages Consultative Council Act 2011 §§44, 47

Results generated on: 02nd September 2014 at 20:50:10.
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