He explained that the increase in the minimum wage from RM1,500 to RM1,700, as announced in the 2025 budget last Friday, is intended as a basic wage for workers with lower academic qualifications and skills, including those in the 3D (dirty, dangerous and difficult) sector.

“It is advisable to offer salaries that reflect employees’ skills and academic qualifications. The minimum wage should not serve as the benchmark for starting salaries for all workers.

“This adjustment in minimum wage is a strategy designed for the most basic workers, especially the 4.35 million individuals currently earning below RM1,700.

“By aligning salaries with academic qualifications, job roles, and skills, companies can benefit as well. If employees are not compensated fairly, we risk losing talent and face challenges in attracting skilled manpower,” he said at an event in Merang, Terengganu today.

In his budget speech on Friday, Prime Minister Anwar Ibrahim, who is also finance minister, announced that the minimum wage would be increased to RM1,700 per month, effective Feb 1, 2025, and Aug 1, 2025, for employers or small entrepreneurs with fewer than five employees.

Sim emphasised that the wage adjustment period provided was both reasonable and sufficient, urging employers to comply with the established guidelines.

He encouraged anyone, particularly workers aware of labour law violations, including those related to the minimum wage, to report such instances to the ministry, specifically to the labour department, so that appropriate actions can be taken.

He clarified that the increase in the minimum wage is not intended to burden employers. Instead, it aims to enhance employees’ purchasing power, which will indirectly generate economic benefits for local entrepreneurs and small businesses.