Statutory minimum wages

The example of Malaysia

Malaysia adopted a system of minimum wages in 2013, applying to all workers except domestic workers. Two different rates apply – one rate for Peninsular Malaysia, and another for Sabah, Sarawak and the Federal Territory of Labuan.

The government makes the final decision about minimum wage levels following recommendations from the National Wages Consultative Council as well as after consulting relevant stakeholders throughout the country. The government may either agree with the Council’s recommendations or direct it to make fresh recommendations. The Council has suggested a set of criteria and a formula to guide the adjustment of minimum wage rates.

The National Wages Consultative Council is a tripartite advisory body that also includes technical experts, and was established under the National Wages Consultative Act 2011. It is obliged to have at least four meetings a year. Before making recommendations, the Council must (a) have consultations with the public on the rate and coverage; and (b) collect and analyse data and conduct and disseminate research on wages and socio-economic factors. The Council can also formulate recommendations on the coverage of the minimum wage, its non-application to certain sectors or regions, or implementation-related matters.

In addition to an independent Chairperson, Deputy Chairperson and a public officer acting as the Secretary, the Council consists of at least five members among the public officers, at least five representing employees, at least five representing employers, and at least five other members.

Source: Government minimum wage portal: