Kuala Lumpur:The Cabinet has decided that micro, small, and medium enterprises (MSMEs) will be temporarily exempt from the new minimum wage rate increase.

According to BERNAMA News Agency, Entrepreneur Development and Cooperatives Minister Steven Sim Chee Keong explained that this decision was made considering the sector's capability amid current economic challenges and operational cost pressures.

The government plans to adopt alternative measures to boost employee wages in the MSME sector, such as wage subsidy support under the Progressive Wage Policy, aiming for wage increases to align with productivity growth.

Sim highlighted that during the Cabinet meeting, it was acknowledged that while there is a need to raise people's wages, it is also essential to protect local businesses, particularly MSMEs. The government aims to ensure fair wages for workers while maintaining the competitiveness of these enterprises to foster growth and job creation.

Previously, Human Resources Minister Datuk Seri R. Ramanan stated that the government has not yet finalized a decision on the new minimum wage rate, with potential figures being RM2,000, RM2,100, or RM2,200. An official announcement will follow the Cabinet's approval, including that of Prime Minister Datuk Seri Anwar Ibrahim.

Media reports had indicated that Prime Minister Anwar announced an expected increase from the RM1,700 minimum wage rate, with further details to be provided during the 2027 Budget presentation on October 9.