Update salary structure based on qualifications, expert says

SHAH ALAM – Employers are being advised to update their skill-based wage structures following the government’s decision to raise the minimum wage from RM1,500 to RM1,700 effective Feb 1, 2025.

Universiti Sciences Islam Malaysia (USIM) associate professor of human resources management Dr Abdul Rahim Zumrah said the decision signals that companies may consider a new salary structure that takes into account qualifications.

“In this matter, the government is only addressing the ‘base’ issue by setting the new minimum wage from RM1,500 to RM1,700. This serves as a signal for employers to also increase workers’ salaries in accordance with their qualifications.

“The government cannot set minimum wages based on qualifications because the financial capacity of each employer is different.

“For example, it would be unfair for the government to set RM2,500 as the minimum salary for a bachelor’s degree holder because some companies can afford to pay more than this amount while others cannot do so due to financial constraints. ” he said when contacted on Tuesday.

Earlier, Human Resources Minister Stephen Sim reminded employers not to set higher minimum wages as starting salaries for workers in all employment sectors, especially university graduates.

He explained that the minimum wage was not supposed to be the starting salary for all workers, especially graduates, but rather the wage paid to entry-level workers with lower academic qualifications, including those working in dirty, dangerous and complex (3D) jobs.

Rahim added that while the government is not directly addressing each level of educational qualification, employers should pay attention to the issue.

According to him, failure to comply with this requirement could lead to dissatisfaction among employees due to a slight gap in salaries between workers of different qualifications.

“This issue should not be taken lightly. Employers need to consider the new salary structure for all skill levels. No matter how small the increase, the main thing is that there is a change (salary) and a significant difference in qualifications,” he said.