Monday, September 20, 2010

Most countries have Minimum Wage Laws, except Malaysia

Minimum wages - this is something that most countries already have in place. The object is for the State to stipulate a minimum wage that is fair and just sufficient for the worker to be able to have a reasonable life. The only consideration should be the welfare of the worker and their families/dependents, and nothing else. What we are talking about is minimum wages - not the actual wages that a worker should be getting. The purpose of stipulating a minimum wage is to ensure that workers are not exploited by their employers who want to pay an unjust low wage. 

Minimum wages should be different for different regions of Malaysia, and for the different kinds of work and sectors. India, another former British colonized nation, have had the minimum wage law since 1948 - Minimum Wage Act, 1948. There, the setting of the Minimum Wage is done by the State, and in 1996, the Indian Federal government as a matter of policy sets  a National Floor Level Minimum Wage (NFLMW).

It is 2010, and Malaysia still does not have a Minimum Wage law in place, and this is embarrassing.  

It should be an hourly or daily minimum wage that should be set. When it comes to piece rated, we should still pay them an hourly or daily rate just like what India does. 

For a start, as a matter of policy, the Federal Government should set maybe a  National Floor Level Minimum Wage (NFLMW), and thereafter the required Minimum Wage law should be enacted and passed. A time frame of 6 months should be given to ensure a comprehensive Minimum Wage rate is set based on the different regions, employment sectors, kind of work, etc. [Exclusions may be for certain types of very small businesses that employ 5 or less, that may(or may not) have a profit sharing scheme in place over and above the salary]. 

Minimum wages should be calculated having regard to an 8-hour working day, 5 days a week. 

Thailand has got legislation that provide for minimum wages, and different rates are set for different provinces with Bangkok  (206 Baht per day – approximately RM20-60) and the lowest is for the provinces of Payat, Pichit, Phrae and Mae Hong Son (151 Baht per day – approximately RM15-10). Different rates because consideration is also given to cost of living. As the cost of living increases, so does the rate. Thailand’s minimum wage law applies to all workers, local and/or migrant workers. 

Hong Kong – On 17/7/2010, minimum wage law has been passed. The law will require the task group to review the wage level once every two years. The first minimum wage level will be set in November. The current consensus ranges from the HK$24 (RM9.58) an hour backed by business interests to the HK$33 (RM12.78) as demanded by local unions. However, the law doesn't cover the nearly 280,000 mostly Filipino and Indonesian domestic workers who work as live-in help for Hong Kong families. They are currently promised a monthly minimum wage of 3,580 Hong Kong dollars (RM1,437.64). 

India – they have had  the Minimum Wage Act, 1948, Minimum wages are fixed by the State Governments, and for both non-agricultural sector workers and also agricultural sector workers. It is time based usually per day. When it comes to piece rated, section 17 of the Act states, “Where an employee is employed on piece work for which minimum time rate and not a minimum piece rate has been fixed under this Act the employer shall pay to such employee wages at not less than the minimum time rate. “ Besides regions, consideration is also given to the degree of difficulty of the work. For example, when it comes to excavation works, there are different rates depending whether it is soft soil, soft soil with rock or rock. There is also different rates for unskilled work, supervisory workers, clerical workers and highly skilled workers.  The act also provides for  regular review of rates, at least once every five years.

National Floor Level Minimum Wage – Since 1996, the Indian government as a matter of policy sets and National Floor Level Minimum Wage (NFLMW), and States are advised that their minimum wages should be above this. The NFLMW set in 2004 is Rs. 66 per day (about RM4.51) 

Philippines – their Labour Code, in Article 99 stipulates that, “…The minimum wage rates for agricultural and non-agricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards…” Daily minimum wage rates are set for the non-agricultural sector, agricultural sector (plantations) and agricultural sector (non-plantation) and it applies to employers that have 10 or more workers.  As an example for the national capital region, it is currently P404 (RM28.10), P367(RM25.53)  and P367(RM25.53)  respectively

Indonesia – there seem to be no Minimum Wage law but since 1990s, minimum wages have been set by the various different provinces. There are constant reviews, and in the 1990s only, the minimum wage tripled although real wages only doubled.  There is no national minimum wages. 

Other Countries :- The federal minimum wage per hour in the United States is $7.25 [RM23.16] ; in Britain, it's 5.80 pounds (RM28.75); in Canada, it ranges from 8 to 10.25 Canadian dollars (RM24.28 to RM30.99) depending on province; in New Zealand, it's 12.75 New Zealand dollars (RM28.75).

KUALA LUMPUR: Employers should back the government’s proposed minimum wage policy to ensure its smooth implementation hopefully by next year, said Human Resources Minister Datuk Dr S. Subramaniam.
He said employers should not be worried or regard the policy as hampering business.

“Our intention is not to burden the employers. We are only going to set a minimum level in terms of salary, and it is up to the employers to pay whatever amount beyond that level to their employees,” he told reporters here.

On Saturday, Dr Subramaniam was quoted saying that the minimum wage model would be across the board for all sectors but it would vary regionally.

Despite the Governments assurance that the minimum wage policy would not adversely affect the industry, the Malaysian Employers Federation is sticking to its stand that the policy would hurt local businesses and workers as it tends to benefit low-skilled and low-income foreign workers.

MEF executive director Shamsuddin Bardan was quoted as saying that the way to push for higher-income levels was not by basing it on a minimum wage but by increasing employee productivity and performance.
Dr Subramaniam said his ministry was still gathering feedback from various quarters to ensure that the policy on minimum wage would be well consolidated.

The minister is expected to table a paper on minimum wage to the Cabinet by next month.

He said the minimum wage policy was necessary as the salary structure in many sectors had not changed drastically over the years despite rising prices of goods.

“Salaries must commensurate with the increase in the price of goods and the higher standard of living,” he said, adding that the cost of living had escalated over the years.

However, he stressed that the increase in salaries should be in tandem with increase in productivity. — Bernama - Star, 20/9/2010, Back minimum wage policy, Subra urges employers

1 comment:

I swear said...

Singapura also don't have minimum wage.