Minimum Wage Order Implementation 2024: Malaysia’s Move Towards RM1,700 Minimum Wage

The Minimum Wage Order (MWO) 2024 marks another significant step in Malaysia’s ongoing effort to enhance the standard of living and ensure fair compensation for workers nationwide. Gazetted on 4 December 2024, this new order raises the national minimum wage to RM1,700 per month, to be implemented in two stages throughout 2025.

Stage 1: Effective 1 February 2025

The first stage of implementation begins on 1 February 2025. It applies to:

• Employers with five (5) or more employees, and
• Employers engaged in professional activities, as classified under the Malaysia Standard Classification of Occupations (MASCO 2020) — regardless of the number of employees.

For these employers, the new minimum wage must be reflected in March 2025 contributions, which are based on February’s salary.

Stage 2: Effective 1 August 2025

The second stage of implementation will take effect on 1 August 2025, extending the RM1,700 minimum wage to employers with fewer than five (5) employees. These employers must comply starting with September 2025 contributions.

Important Notes for Employers

• The contribution month refers to the month in which contributions are payable, based on the previous month’s salary.
• Employers can refer to the following resources for further information:
  • Malaysia Standard Classification of Occupations (MASCO)
  • Minimum Wages Order (MWO)

Legal Implications and Penalties

Failure to comply with the Minimum Wage Order 2024 is a serious offence under Section 43 of the National Wages Consultative Council Act 2011. Employers found guilty of not paying the mandated minimum wage may face a fine not exceeding RM10,000 for each employee affected.

Conclusion

The implementation of the RM1,700 minimum wage reaffirms Malaysia’s commitment to improving the welfare of its workforce while promoting fair labor practices. Employers are strongly advised to review their payroll systems and ensure full compliance with the updated wage requirements before the respective deadlines in February and August 2025.

By adhering to the Minimum Wage Order 2024, businesses not only comply with legal standards but also contribute to creating a more equitable and sustainable labor environment across Malaysia