Hamzah warns of inequality in exempting MSMEs from RM2,000 minimum wage

Opposition leader Hamzah Zainudin said aid could be conditionally provided to employers that have raised salaries, trained workers and invested in automation. KUALA LUMPUR: Opposition leader Hamzah Zainudin says that exempting micro, small and medium enterprises (MSMEs) from the RM2,000 minimum wage to be implemented next June will create inequality in the workforce.

Debating the 2027 budget in the Dewan Rakyat today, the Larut MP said the exemption granted to companies with an annual turnover below RM50 million would see their workers continue to be paid the current minimum of RM1,700.

"Bigger companies will have a minimum wage of RM2,000, while the minimum wage at MSMEs will remain at RM1,700," he said, calling for a uniform minimum wage for all workers alongside aid or incentives for struggling employers.

Tabling the budget on Friday, Prime Minister Anwar Ibrahim said MSMEs with annual sales below RM50 million would be exempted to allow them time to adjust their business models.

However, Hamzah argued that the RM300 gap would incentivise MSME workers to move to higher-paying companies, making it more difficult for smaller employers to retain workers.

He said owners of shops, workshops and small factories would have to choose between raising the minimum wage to RM2,000 and risking the loss of their workers.

He also questioned the one-percentage-point decrease in income tax for MSMEs, saying it would not help companies that have yet to record profits.

"That decrease is only on paper. MSMEs will continue to bear costs unaided," he said.

Hamzah suggested that funds for MSME incentives be channelled through the Social Security Organisation to help small employers increase salaries in tandem with productivity.

He said such aid could be conditionally given to employers that have raised salaries, trained workers and invested in automation.

Hamzah also proposed a one-percentage-point corporate tax exemption for three years for non-MSME companies that raise employee wages to the new minimum level.

"A government that listens to the grievances of MSMEs is a government that is willing to take on a share of their transition costs for a few years until productivity can sustain higher wages," he said.