Malaysia pauses minimum wage hikes for MSMEs to ease cost pressures

At a recent Cabinet meeting, officials agreed to temporarily shield micro, small and medium enterprises from any further increases to the statutory minimum wage. SME Malaysia president Dr Chin Chee Seong praised the decision, saying it will allow firms to cope with higher operating costs, safeguard employment and remain competitive. Entrepreneur and Cooperatives Development Minister Steven Sim emphasized that workers' wages should still rise, but that support for MSMEs is essential; the government will rely on wage subsidies through the Progressive Wage Policy, tying hikes to productivity improvements.

Dr Chin urged the government to boost the level of financial support, expand eligibility and streamline the application process for these subsidies. He added that stronger incentives would let MSMEs raise pay while investing in productivity, digitalisation and skills development. SME Malaysia plans a joint press conference with the Malaysia Retail Chain Association to discuss the issue and release a survey on business cost pressures and wage policy views.