Globalization and Malaysia

June 1st, 2016

The Malaysian government is increasing the minimum wage as of July 1st, 2016. Malaysians are facing increasing costs of goods and services and a rising cost of living in general. The new minimum wage will be raised to 1,000 ringgit (US $230) for workers in peninsular Malaysia and 920 ringgit for those in East Malaysia. The current minimum wage is RM900 in the Peninsular and RM800 in East Malaysia. The new wages include all employees in the private sector, regardless of the number of employees they have. The new wages only exclude domestic workers.

One of the Malaysian government’s goals for the new wage hikes is to provide local workers with more opportunities in various occupations across industries and technologies and to reduce dependence on foreign workers in general. Also, "The government hopes the new minimum wage rates can boost the income of Malaysians, as well as help improve the country's economy in achieving the status of a high-income nation by 2020," said Human Resources Minister Datuk Seri Richard Riot in The Malay Mail Online.

The government is also considering putting into place an insurance scheme to help workers who have lost their jobs and to help both workers and employers to cope with a more demanding labor market. The proposed Employment Insurance System (SIP) is aimed to increase the time period from 6 months to a year when workers are getting financial aide while searching for a new job. The insurance scheme will also provide retrenched workers with new job training to give them additional skills. This will also benefit employers, as they will be able to hire those with suitable skills sets.

These are a couple of the impacts of globalization to Malaysia. For any more questions about working in Malaysia or questions regarding compliance across all Asia, please contact Tiger-Consulting Asia at We have more than a dozen offices across Asia Pacific to support business operations in Australia, Cambodia, China, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, USA, Vietnam & UAE. Also, recently expanding in three new countries - Madagascar, Bahrain, & Pakistan. Custom quotes are free of charge.

Mercy Mildener
Public Relations and Marketing Consultant

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