Kuala Lumpur:The Malaysian Employers Federation (MEF) has expressed support for the proposed exemption of micro, small, and medium enterprises (MSMEs) with annual sales turnover below RM50 million from the upcoming minimum wage increase. The federation emphasized the necessity for clear guidelines to facilitate this implementation.
According to BERNAMA News Agency, MEF Senior Advisor Datuk Dr. Syed Hussain Syed Husman highlighted that the exemption acknowledges the financial challenges faced by smaller businesses, which may struggle to cover increased operating costs. Under Budget 2027, announced by Prime Minister Datuk Seri Anwar Ibrahim, the national minimum wage is set to rise from RM1,700 to RM2,000 on June 1, 2027. However, eligible MSMEs will be exempt from this increase.
Syed Hussain noted that this proposal provides smaller businesses with the opportunity to fortify their operations, boost productivity, and prepare for future wage adjustments without jeopardizing their financial stability. He affirmed the importance of balancing wage improvements for workers with the financial resilience of employers, particularly MSMEs, which are crucial for job creation and economic development in Malaysia.
He further explained that increased wages would also lead to higher related employment costs, such as statutory contributions and overtime payments. Thus, it's vital for businesses to have adequate time and resources to adapt. Clear eligibility criteria, effective communication, and practical support are necessary to ensure the policy is implemented smoothly.
The MEF also urged the government to monitor the policy's effects on employment, wage levels, and business performance to achieve the intended benefits without adversely affecting hiring or business continuity.
Under Budget 2027, MEF welcomed measures to bolster MSMEs, including an increase in financing facilities and guarantees to RM57 billion in 2027 and a one-percentage-point reduction in MSME income tax rates, benefiting about 300,000 businesses. Additionally, a RM30 million allocation will support 4,000 MSMEs in adopting artificial intelligence and automation, which could enhance business efficiency and competitiveness.
Syed Hussain stressed the importance of efficient implementation of these measures, with straightforward application procedures, transparent eligibility criteria, and timely disbursement of approved financing and assistance. He also expressed MEF's intention to strengthen collaboration with the Ministry of Entrepreneur and Cooperatives Development to ensure policies effectively address business needs while promoting sustainability and worker welfare.