By MR.YKLAI,MHRM|TTTPresidentMalaysianIndustrialCommercialServiceEmployersAssociation(MICSEA)
KUALALUMPUR,9OCTOBER2026– TheMalaysianIndustrialCommercialServiceEmployersAssociation(MICSEA)welcomesBelanjawanMADANI2027,themed“MenggapaidiLangit,MengakardiBumi”,anditsincreaseinthenationalminimumwagefromRM1,700toRM2,000,effectiveJune2027.MICSEAcommendstheGovernmentforbalancingworkerwelfare,fiscalresponsibilityandsustainablegrowth,andurgestargetedsupportsothathigherwagesdonotresultinbusinessclosures,jobcutsorpriceincreases.
MICSEAPresidentMrYKLaisaid:“MICSEAsupportstheGovernment’sdirectiontoimproveworkers’incomeandstrengthensocialprotection.Atthesametime,wemustrecognisethatMSMEsoperateunderverydifferentfinancialrealitiesfromlargecorporations.Manyrunonthinmargins,facerisingcostsandcannotimmediatelypassadditionallabourcostsontocustomers.Astrongerworkermustbesupportedbyastrongerandsustainableemployer.”
FivemeasuresMICSEAiscallingfor
1.AtransitionalwagerebateforfirmswithturnoverofRM50milliontoRM100million
MICSEAwelcomestheexemptionfromtheRM2,000minimumwageforMSMEswithannualturnoverbelowRM50million,callingitanimportantsafetynetforsmallerfirmswithlimitedcashreserves.
However,itwarnsofa“cliff-edge”effect.AcompanywithRM49millioninturnoverandonewithRM51millionmayhavesimilarworkforces,marginsandbusinessmodels,yetfaceverydifferentregulatoryobligations.MICSEAproposesatemporarywage-relatedtaxrebateorwageoffsetinthefirstyearofimplementationforfirmsintheRM50milliontoRM100millionrange.
“Theobjectiveisnottodelaycompliance,”theassociationsaid.“TheobjectiveistopreventthetransitionfrombecomingapenaltyforbusinessesthathavesuccessfullygrownbeyondtheMSMEthreshold.”
2.A1:1matchinggrantforproductivityandautomation
Withoutproductivitygains,MICSEAsaysMSMEsfacethreechoices:raiseprices,cutmanpowerorautomate.ItwantstheGovernmenttohelpbusinesseschooseautomationbyexpandingdigitalisationincentivesandintroducinga1:1matchinggrantforeligibleMSMEs.SupportshouldcoverAI-poweredbusinesssystems,workflowautomation,digitalaccountingandpayroll,automatedPOS,self-servicetechnologies,workforcemanagementplatformsandAI-enabledcustomerservice.
3.Askills-andproductivity-linkedRM2,500startingsalary
MICSEAsupportsraisingstartingsalariesforgraduatesandsemi-skilledworkers,butsaystheRM2,500frameworkshouldnotbeablanketrequirementacrossallpositions.ItrecommendslinkingtheframeworktoMalaysianStandardClassificationofOccupations(MASCO)classifications,TVETqualifications,SKMLevel4and5competencies,jobcomplexity,professionalcertificationanddemonstrableproductivity.
TheassociationwarnsthatinMSMEs,wherepaygapsbetweenjuniorstaff,supervisorsandmiddlemanagersareoftennarrow,asharpriseinentry-levelpaycouldcausewagecompression,withexperiencedemployeesexpectingmatchingincreases.
4.Simplifiede-KYCbankingforlegalforeignworkers
MICSEAsupportspayrollformalisation,sayingitcreatesalevelplayingfieldbetweencompliantemployersandthoserelyingoninformalorillegallabour.ButitwantsMOF,KESUMA,BankNegaraMalaysiaandfinancialinstitutionstoestablishasimplifiede-KYConboardingmechanismforlegalforeignworkers,andtogiveemployersclearguidancewherelegallyrecogniseddigitalpaymentchannelsarepermitted.
“Employersshouldnotbepenalisedforbankingandadministrativeobstaclesthatareoutsidetheircontrol,”itsaid.
5.Consistentsocialprotectionacrossthegigeconomy
MICSEAwelcomesstrongersocialprotectionforgigworkers,butnotesthatretailers,restaurants,logisticsoperators,smallmanufacturersandfacilityoperatorsincreasinglycompetewithplatform-basedworkforthesamepoolofworkers.Itcallsforobligationstobeappliedconsistently,withplatformoperatorscontributingappropriately,sothatMSMEemployersarenotplacedatastructuraldisadvantage.
TaxReliefWelcomed
MICSEAalsowelcomedtheincreaseinindividualtaxrelieffromRM9,000toRM12,000,alongwithreductionsinselectedmiddle-incometaxratesandexpandedeligiblereliefs.
“Fromanemployerperspective,employeewelfareisnotsolelyaboutgrosssalary.Whatultimatelymatterstoemployeesistheirdisposableincome,”theassociationsaid,addingthatexpandedtaxreliefraisestake-homepaywithoutplacingtheentireburdenonemployers.
WhatHappensNext
MICSEAiscallingforcontinuedtripartiteengagementamongtheGovernment,employersandworkersbeforethe2027reformstakeeffect,andfortheperioduptoJune2027tobeusedtoissueclearimplementationguidelines,transitionalmechanismsandpracticalcompliancesolutions.
MrYKLaiadded:“BelanjawanMADANI2027hastakenanimportantsteptowardsraisingtheincomefloorofMalaysianworkers,andwewelcomethatdirection.Butwagepolicycannotoperateinisolation.OurmessagetotheGovernmentisnot‘donotincreasewages’.Itis‘helpMSMEsincreaseproductivitysothathigherwagesbecomesustainable’.MSMEsarethebackboneofMalaysia’seconomyandamajorsourceofemployment.WebelieveMalaysiacanachievebetterwages,strongerMSMEsandbetterjobsatthesametime,butonlythroughacarefullycalibratedtransition.”
