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The exemption aims to give eligible businesses time to adjust their finances and operations, as the wage increase is expected to benefit more than 4mn workers.
Malaysia will exempt micro, small, and medium enterprises (MSMEs) with annual sales below RM50mn from the RM2,000 minimum wage requirement when it takes effect in June 2027.
According to a Facebook post by Ministry of Economy, YB Tuan Haji Akmal Nasrullah Haji Mohd Nasir, Minister of Economy, outlined the measure during Ministerial Question Time in the Parliament, in response to a question from YB Tuan Haji Aminolhuda bin Hassan, Member of Parliament for Sri Gading.
The question concerned the Government’s plans to ensure the minimum wage increase does not affect employment opportunities, push up the prices of goods, or increase operating costs for MSMEs.
Announced under Budget 2027 on 9 October 2026, the increase from RM1,700 to RM2,000 is expected to benefit more than 4mn workers.
The exemption is intended to give eligible businesses more time to reorganise their finances and operations without resorting to drastic measures, including retrenchments.
Enforcement of the Minimum Wages Order will be carried out by the Department of Labour Peninsular Malaysia, Sabah and Sarawak, in accordance with the National Wages Consultative Council Act 2011.
Workers affected by retrenchment who are covered under the Employment Insurance System (EIS) may also claim benefits, including a Job Search Allowance for up to six months, subject to eligibility requirements.
To prevent higher wages from placing additional pressure on prices and the cost of living, the Government will tighten enforcement of the Price Control and Anti-Profiteering Act 2011, manage strategic supplies and expand access to essential goods at affordable prices.
These efforts include the Jualan Rahmah MADANI (PJRM) and Jualan Agro MADANI programmes.
A total of RM700mn has been allocated for 30,000 targeted PJRM sales programmes in rural areas, low-cost housing areas and urban People’s Housing Programme (PPR) communities.
Another RM50mn has been set aside for 5,000 Jualan Agro MADANI programmes nationwide. These programmes will offer fresh agricultural and food products at prices 10% to 30% below market rates.
Meanwhile, the National Cost of Living Action Council will continue to monitor developments in the cost of living and implement appropriate measures to safeguard the public’s wellbeing.
Lead image / Ministry of Economy
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