Employers MUST Pay RM1,700 Minimum Wage to All Staff Starting August, Including Foreign & Contract Workers

Effective August 1, all employers in Malaysia (without exception) will be required to pay their employees a minimum monthly wage of RM1,700.

The new wage rate was initially announced in Budget 2025 and has been enforced since February 1 for employers with five or more workers, as well as those involved in professional activities classified under the Malaysia Standard Classification of Occupations (MASCO) 2020.

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“Employers must ensure all wages meet the new minimum”

According to the Ministry of Human Resources (KESUMA), the move is aimed at helping companies keep skilled workers and stay competitive in today’s tough job market, as reported by Sinar Harian.

The 2024 Minimum Wage Order (MWO) will soon be fully enforced, covering all employers (regardless of the number of workers they employ), including those who previously got a six-month delay. Meanwhile, for those with fewer than five workers, that grace period ends on July 31.

The order also applies to foreign workers and apprentices under contract, but domestic helpers aren’t included.

“Employers are reminded to review their salary structures to make sure no one’s getting paid below the new minimum. They’re also encouraged to gradually improve operations by boosting productivity and investing in upskilling their workers,” the ministry added.

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Employers can be fined up to RM10,000 per employee

Failure to comply with the order constitutes an offence under the National Wages Consultative Council Act 2011 (Act 732), and may result in a fine of up to RM10,000 per employee.

Additionally, a daily fine of RM1,000 may be imposed for each day the violation continues after conviction. For repeat offences, employers could face a maximum fine of RM20,000 or imprisonment for up to five years.

At the same time, the government is encouraging employers to adopt the Progressive Wage Policy (PWP), which is a voluntary initiative designed to complement the minimum wage implementation.

“Through the PWP, employers have the opportunity to raise workers’ incomes based on productivity, skills, and job performance, while also benefiting from targeted cash incentives provided by the government.”

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