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The minimum wage increase is expected to benefit more than 4mn workers, with Budget 2027 also setting aside RM8bn for TVET and outlining further measures for gig worker protection and employment support.
Malaysia's Ministry of Human Resources (KESUMA) has received RM1.938bn under Budget 2027 to support workforce development, improve access to quality jobs and strengthen social protection.
Winding up the debate on the Supply (Budget) Bill 2027 in the Parliament on 29 October 2026, Dato' Sri Ramanan Ramakrishnan, Minister of Human Resources outlined the ministry's plans to raise workers' incomes, strengthen skills development, improve graduate employability, and expand protection for gig workers.
The measures also cover employment support for persons with disabilities (PWDs) and initiatives to improve the socio-economic opportunities of the Indian community.
Minimum wage to increase to RM2,000, benefiting over four mn workers
Malaysia's minimum wage will increase from RM1,700 to RM2,000 per month from June 2027, a move expected to benefit more than 4mn workers nationwide.
To give micro, small, and medium enterprises more time to adjust to the higher labour costs, businesses with annual sales revenue below RM50mn will be exempted from implementing the new rate.
KESUMA said the revised rate was determined through a study that considered economic indicators such as the Poverty Line Income (PGK), median wages, labour productivity, inflation, and employers' ability to pay. The study involved 1,967 employers and 3,197 employees, alongside 21 engagement sessions attended by 1,407 employer representatives, and 1,189 employee and union representatives.
In addition to the minimum wage increase, the ministry has outlined a starting basic salary framework of RM2,500 for graduates and semi-skilled jobs. This will serve as a reference for employers when setting salaries according to employees' qualifications and skills.
The Basic Starting Salary Guidelines, based on the Malaysian Occupational Classification Standards (MASCO), are available through the e-MASCO portal. The guidelines will be updated regularly to reflect labour market developments and industry needs.
The framework will be supported by the Progressive Wage Policy (DGP) and Productivity-Linked Wage System (PLWS), which encourage gradual salary increases based on employees' skills, experience and productivity.
KESUMA will also continue enforcing minimum wage compliance through statutory inspections, special operations, complaint investigations, and labour case management. It is also detailing the implementation of an e-wages module to improve transparency and monitoring of wage payments.
RM8bn for TVET, with 3mn training opportunities
For workforce development, the government has allocated RM8bn towards Technical and Vocational Education and Training (TVET) across 12 ministries.
The funding will focus on developing industry-relevant skills, improving productivity and preparing a competitive local workforce.
Of this, Human Resources Development Corporation (HRD Corp) will leverage RM3bn in levy funds to support three million training opportunities. This includes more than RM40mn to train 8,000 Malaysians for the elderly care sector.
Another RM500mn has been allocated through the Skills Development Fund Corporation (PTPK) to finance skills training at registered public and private training institutions.
KESUMA also highlighted the Department of Manpower's (JTM) graduate employability performance. According to the TVET Graduate Tracking Study (SKPG) 2026, JTM recorded a graduate employability rate of 98%, with 85.4% of graduates working in fields related to their training.
As at 30 September 2026, a total of 81,982 participants had attended training programmes through JTM's network of 33 campuses and two ADTEC JTM satellite campuses nationwide.
Separately, the MADANI Talent Programme, through Talent Corporation Malaysia (TalentCorp), aims to create 30,000 new job opportunities by 2027, including through partnerships with the private sector.
The ministry is also expanding the Malaysian Modular Skills Certificate (MCSC) and Academy in Industry (ADI) to provide more flexible, practical training aligned with industry requirements.
These initiatives will focus on high-growth and high-value sectors, including semiconductors, electronics and artificial intelligence (AI).
Gig worker minimum income formula expected by early 2027
On gig worker protection, KESUMA is continuing its efforts to implement the Gig Workers Act 2025 (Act 872), which came into effect on 1 March 2026.
The ministry is focusing on income transparency, occupational safety and health protection, and the welfare of gig workers.
Through the Gig Consultative Council (MPGig), KESUMA is refining a formula to calculate minimum income rates and establish protection standards for the group.
The study involved 13 engagement sessions, 14 focus group discussions, 37 in-depth interviews and a survey of 1,962 gig workers. It also included a review of 487,805 individual transaction records.
The findings are expected to support the finalisation of the income calculation method and minimum standards by early 2027. Factors being considered include the cost of living, operating expenses, inflation and workers' actual needs.
Separately, as further announced in Budget 2027, a RM160mn joint financing package between the government and Grab will support the net income and welfare of e-hailing and p-hailing workers.
The package includes assistance for vehicle maintenance costs, insurance, and contributions to the Social Security Organisation (SOCSO).
KESUMA, through the Department of Occupational Safety and Health (DOSH), is also strengthening safety guidance for gig workers. The guidelines cover hazard identification, risk assessment, safety control measures and emergency procedures.
RM150mn allocated for Indian community development
Budget 2027 also provides RM150mn to the Malaysian Indian Community Transformation Unit (MITRA), with a focus on skills development and expanding access to higher-income employment opportunities for Indian youth.
Priority areas include industrial automation, technology and aircraft maintenance, with the aim of helping more young people acquire relevant skills and enter higher-value employment sectors.
A further RM150mn has been allocated through TEKUN Nasional and Amanah Ikhtiar Malaysia (AIM) to support small entrepreneurs from the Indian community in growing their businesses.
Another RM50mn will go towards maintenance and repair works at Tamil National Type Schools (SJKT), particularly those facing infrastructure challenges.
For 2026, 12 socio-economic development programmes for the Indian community, involving RM100mn in funding, have benefited 110,541 recipients.
MITRA has also implemented education intervention programmes spanning pre-school to higher education. These programmes received more than RM36.2mn in funding and benefited 24,886 students and undergraduates throughout 2026.
KESUMA said it will continue working with government agencies, educational institutions and industry partners to support programmes covering education, skills training, entrepreneurship and employment.
SOCSO to strengthen social protection and inclusive employment
Beyond wage and skills initiatives, KESUMA will continue strengthening the social safety net through SOCSO, particularly for workers facing job loss, labour market changes and career transitions.
Under the LINDUNG Kerjaya Scheme, eligible workers can access benefits such as job search allowance, shortage income allowance, training fee financing and training allowances.
Job matching services through the MYFuture Jobs portal and skills enhancement programmes are also available to help workers return to employment.
The ministry is also continuing initiatives to improve employment opportunities for PWDs. These include the Re-Employment Support, Treatment and Rehabilitation Teamwork (RESTART) Programme, Disability Equality Training (DET) and Return To Work Coordinator (RTWC).
Separately, KESUMA is studying ways to strengthen social security protection for students undergoing industrial training – including examining possible protection mechanisms under the Self-Employment Social Security Act 2017 (Act 789), as well as the development of suitable protection schemes.
The review will consider the needs of students, particularly those undertaking placements in higher-risk sectors, alongside the capabilities of stakeholders, and the legal and financial implications of implementing such measures.
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Lead image / KESUMA Facebook
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