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Minister: Malaysia’s pay inequity a result of relying on foreign workers



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Malaysia’s Second Finance Minister Datuk Johari Abdul Ghani has said the country’s heavy reliance on foreign workers is hurting salary structures, in a radio interview last week.

While industries like plantation and construction genuinely require foreign workers, he noted that foreign workers should be used only when locals aren’t available, in an interview with BFM on its Breakfast Grille programme, as reported in Malay Mail Online (MMO).

MMO quoted him as saying: “I still think that [in] this system, we need to be very focused, to make sure that whichever industry that we want to employ foreign workers, it has to be [an] industry that really really locals can’t adopt [sic].”

Earlier this year, Malaysia’s deputy prime minister, Ahmad Zahid Hamidi, announced the government freezing intake of foreign workers, including those from Bangladesh – with an appeal to all employers to hire domestic workers.

This decision was welcomed by Malaysian Trades Union Congress (MTUC), whose secretary-general, N. Gopal Kishnam, had said: “This decision should be enforced strictly and thoroughly to help reduce reliance and dependence on foreign workers.”

However, within three months, the ban was lifted in four sectors which had appealed owing to acute staff shortages – manufacturing, construction, plantation and furniture-making sectors.

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In addition, Malaysia’s Human Resources Minister Datuk Seri Richard Riot put the Minimum Wages Order 2016 (MWO 2016) into effect July 1 this year.

These wages have been set according to region, namely RM1,000 per month or RM4.81 per hour for Peninsular Malaysia, and RM920 per month or RM4.42 per hour for Sabah, Sarawak and Labuan.

The daily minimum wage rate is subject to a maximum of 48 hours per week, which means in the peninsula, for a six-day working week (48 hours), the daily minimum wage rate is RM38.46, five days/week at RM46.15, and four days/week at RM57.69.

In Sabah, Sarawak and Labuan, for a six-day working week the daily minimum wage rate is RM35.38, five days/week at RM42.46, and four days/week at RM53.08, the MWO stated.

The order involve all employees in the private sector, regardless of the number of employees they have, except domestic helpers (maids).

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