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Malaysia

Budget 2027 must consider SMEs' capacity in minimum wage review, MICSEA says

MICSEA urged the Malaysian government to assess and implement any new minimum wage rate in stages as part of Budget 2027, the association said in a statement issued from Kuala Lumpur on 29 September 2026.

Source: Astro Awani · September 29, 2026 at 7:32 PM · AI-assisted report

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Budget 2027 must consider SMEs' capacity in minimum wage review, MICSEA says
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Photo: schaitanya via flickr (BY-SA)

KUALA LUMPUR, 30 SEPTEMBER 2026 —

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MICSEA urged the Malaysian government to assess and implement any new minimum wage rate in stages as part of Budget 2027, the association said in a statement issued from Kuala Lumpur on 29 September 2026.

Market Impact

The association explained that the call follows the need to ensure wages keep pace with the rising cost of living while preserving workers’ purchasing power, a point MICSEA said it acknowledges as a fact.

MICSEA warned that micro and small enterprises could struggle to absorb a sudden wage hike, stressing that any increase must reflect the actual capacity of businesses and the time they require to adjust, according to the association’s statement.

It highlighted that the gap between entry‑level and experienced wages is narrowing in public debate, noting that if the entry‑level salary rose from RM1,700 to RM2,000, the difference to an experienced operator earning RM2,100 would shrink to only RM100.

MICSEA added that employers would then face pressure to raise the pay of technicians, skilled production workers, quality‑control staff, team leaders and junior supervisors, or risk losing those employees, a consequence the association said follows from the wage‑gap observation.

The association calculated the direct cost impact for a firm with ten workers earning RM1,700 each: raising the base salary to RM1,900 would add RM24,000 per year in basic wages, while an increase to RM2,000 would add RM36,000 per year, and it reminded employers that they must also contribute the statutory 13 percent EPF for workers earning RM5,000 or less monthly, with overtime, shift allowances and other wage‑related costs further raising the total expense.

MICSEA’s president, YK Lai, was quoted as saying, “Tambahan sebanyak RM300 pada gaji asas bukanlah bermakna jumlah kos meningkat sebanyak RM300 sahaja.”

The association cautioned that an excessively high and abrupt minimum‑wage increase could lead to fewer job vacancies, reduced overtime, faster automation, greater outsourcing, business closures or a shift of work to the informal sector, outcomes it said would follow from such a policy.

MICSEA called for tripartite talks involving employer associations, trade unions, small and medium enterprises, industry groups, economists and regional business representatives before any final decision is made, and it urged that these discussions be conducted through the National Wage Consultative Council (MPGN).

It said the talks should cover inflation, cost of living, employment levels, business sustainability, investment, regional variations and the wage rate itself, according to the association’s statement.

Berita, sorotan utama, dan segala dari Awani terus ke peti masuk anda.

Reporting based on Astro Awani. Figures and claims are subject to revision as the story develops. DomainFork publishes editorial context, not investment advice — see our editorial standards.

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