Progressive wage model a win for employees and bosses, says Sivakumar

PUTRAJAYA: Introducing a progressive wage model will improve employee productivity and increase profits for employers, says Human Resources Minister V. Sivakumar.

“(The progressive wage model) will definitely be helpful for employers because they want to maximise profit. This will encourage employees to increase productivity, which, in effect, will increase profit,” he told reporters after his ministry’s Rahmah Mesra Deepavali event here yesterday.

He was commenting on Economy Minister Rafizi Ramli’s proposal to introduce a voluntary progressive wage model in Dewan Rakyat last week.

Sivakumar added that a progressive wage model will complement the country’s minimum wage of RM1,500 by rewarding employees with high skills and productivity.

“The current system in place is a minimum wage model, which only helps low-income earners and doesn’t take into consideration an employee’s productivity.

“We are currently looking at other wage models that offer better pay for workers who have high productivity and skills,” he said.

Sivakumar also said a White Paper on progressive wages has been approved by the National Economic Action Council (NEAC) and will be tabled in the Dewan Rakyat on Nov 30.

On Nov 8, Rafizi told the Dewan Rakyat that the government’s proposed progressive wage model will be voluntary and use a “carrot-and-stick” approach for employers.

He added that if employers choose to opt for the progressive wage scheme and pay their employees according to the government’s prescribed rates, based on sector and skill level, they will be eligible for specific cash incentives.

Separately, Sivakumar said his ministry will take swift action against any employer who abuses foreign workers, including domestic helpers.

He was responding to Indonesian Ambassador to Malaysia Datuk Hermono, who said some domestic workers have not received their pay for up to 19 years, and 90% of the complaints received by the Indonesian Embassy were related to domestic helpers.

“The Labour Department will take swift action against any employer who abuses their helper.

“We have seen this issue repeatedly and will not hesitate to take action against these employers,” Sivakumar said.