Business

Sabah Employers Association say “Nay” to minimum wage

Sabah Employers Association believes that the announcement of RM1,200 minimum wage for specified ‘city areas’ is inadvertently discriminatory.

The segregation between “urban” and “rural” areas is against the fundamental tenet of ensuring equal wage basis for all employees.

Minimum wage serves only to ensure the same starting platform for all employees, regardless of differences of any nature, and should not be used (neither is it effective) to address living costs and expenses issue.

The mechanism to differentiate between “urban” and “rural” will cause ludicrous differences in employees’ wages and business’ cost of production; literally depending on which side of the road one is situated on.

Finance Minister Lim Guan Eng announced to increase minimum wage to RM1,200 per month at major towns during the tabling of 2020 Malaysia Budget

Demarcation between district councils can be separated by just one road; one side will be classified as “urban”, while the other side under the jurisdiction of another district council not listed in the Act will be considered as “non-urban”, or “rural”.

This will only cause unnecessary angst amongst not just employees envying their counterparts across the road, but also businesses already facing higher operating costs in urban areas being punished further;becoming less competitive in due course.

More thoughts or analysis should have been conducted before adopting this mechanism, which despite the best intention is now discriminatory in nature, with confusing implications.

A company with many branches across Sabah will see some of its employees working in branches outside Kota Kinabalu, Sandakan or Tawau complaining of lower minimum wages compare to colleagues working in the 3 ‘urban’ areas, despite performing the same tasks.

This is an impulsive, populist move that has made puppetry out of the Minimum Wage Consultative Council, and neglecting the egalitarian tenet upon which minimum wage was first consolidated as one rate for all in 2013.

To hastily announce this mechanism with barely two weeks left before implementation will see confused businesses scrambling to determine the applicability and incurring cost adjustments, some employees bitterly counting the unfair opportunity cost losses; all of these frantic activities occurring during this supposedly joyous holiday season.

STATEMENT BY SABAH EMPLOYERS ASSOCIATION

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