Understanding Malaysia’s Minimum Wages Order 2024: Key Updates for Employers and Employees

Malaysia’s Minimum Wages Order 2024 – What You Need to Know

The Malaysian government has introduced the Minimum Wages Order 2024 under P.U. (A) 376/2024, outlining significant wage adjustments. Effective from 1 February 2025, this order affects both large and small businesses. Employers and employees alike must understand these changes to ensure compliance and proper compensation practices.

Who Does the Minimum Wages Order 2024 Apply To?

1. Employers with 5 or more employees.
2. Employers who, regardless of the number of employees, engaged in professional activities classified under the Malaysia Standard Classification of Occupations (MASCO), as officially published by the Ministry of Human Resource. (Reference: MASCO 2020)
3. Employers with fewer than 5 employees, not listed under MASCO.

Key Effective Dates for the New Minimum Wage

1 February 2025: Applicable to companies with five or more employees and professional activity-based employers under MASCO. (employers mentioned in point 1 and 2)

1 August 2025: Employers with fewer than five employees who are not classified under MASCO guidelines. These staggered timelines aim to provide smaller businesses additional time to adjust and comply with wage increments.(employers mentioned in point 3) 

Why Is Compliance Important?

Non-compliance with the Minimum Wages Order can result in penalties and legal implications for employers. Beyond legal obligations, fair wages ensure:

• Higher employee satisfaction
• Reduced turnover rates
• Enhanced company reputation

How to Prepare Your Business for the Minimum Wages Order 2024

• Review Your Current Payroll: Ensure all wage structures meet the minimum requirements.
• Identify Compliance Timelines: Check if your company falls under the “5 or more employees” or “fewer than five” category.
• Consult HR Experts: Seek professional advice from companies like MYWave on restructuring wages, especially for businesses operating under MASCO.
• Educate Employees: Communicate wage changes clearly to your workforce to build trust and transparency.

Key Resources and Links

For further details, refer to the official publications:

Minimum Wages Order 2024: P.U. (A) 376
MASCO 2020 Guidelines: MASCO 2020

Conclusion

The Minimum Wages Order 2024 represents Malaysia’s ongoing commitment to fair employee compensation. Employers must act promptly to assess wage compliance and ensure readiness for the February 2025 deadline. Smaller businesses, with their extended timeline, should use this period to plan effectively.

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