28th October 2015

Dear Members,


The very recent Budget 2016 outlined that minimum wage for private sector workers in the country will increase from 1st July 2016. The new rates are as follows:

  • Peninsula Malaysia – From RM900 to RM1000
  • Sabah & Sarawak – From RM800 to RM920

The Minimum Wages Order 2012, under s.5 provides that employers may further reduce the minimum wage of a probationer by 30% for the first six (6) months. Employers are advised that this section will continue to be in force even with the increased rates.

For employers who are currently paying the minimum wage without any further allowances, you are obliged to increase the rates from 1st July 2016 onwards.

For employers who are currently paying the minimum wage with some other allowances, we advise that you try consolidating such amounts into a clean wage by way of mutual consent. This can be done anytime without the need to wait until 1st July 2016.

The minimum wage is reviewed once every two (2) years therefore the next change can be expected to happen in 2018 or 2019.


Yours sincerely,


Victor Gan
Senior Legal Consultant

HP: +6012-6536262
Email: [email protected]