Kuala Lumpur:The Malaysian Employers Federation (MEF) has endorsed the proposed exemption of micro, small, and medium enterprises (MSMEs) with annual sales turnover below RM50 million from the upcoming minimum wage increase. MEF emphasized the necessity for clear implementation guidelines.
According to BERNAMA News Agency, MEF Senior Advisor Datuk Dr Syed Hussain Syed Husman noted that the exemption acknowledges the diverse financial capacities of businesses, particularly the smaller enterprises that might face challenges in managing 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, effective June 1, 2027. However, MSMEs with annual sales below RM50 million will be exempt from this increase.
Syed Hussain stated that the proposal allows smaller businesses time to strengthen operations, enhance productivity, and prepare for future wage adjustments without compromising financial stability. He highlighted the importance of considering employers' financial resilience, especially MSMEs, which are crucial for employment, supply chains, and Malaysia's economic development.
He further explained that increased wages would lead to higher employment costs, such as statutory contributions and overtime payments. Therefore, it is vital for companies to have adequate time and resources to adapt.
MEF also welcomed measures in Budget 2027 to bolster MSMEs, including an increase in financing facilities and guarantees to RM57 billion in 2027 from RM50 billion in 2026, along with a one-percentage-point reduction in MSME income tax rates. These changes are anticipated to benefit approximately 300,000 businesses.
Additionally, a RM30 million allocation is set to assist 4,000 MSMEs in adopting artificial intelligence and automation, which MEF believes will enhance business efficiency and competitiveness.
Syed Hussain urged the government to implement these measures efficiently, ensuring straightforward application procedures, transparent eligibility criteria, and timely disbursement of financing and assistance. He also emphasized the importance of ongoing collaboration with the Ministry of Entrepreneur and Cooperatives Development to align policies with business needs while supporting sustainability and workers' welfare.