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Showing posts with label Wage. Show all posts
Showing posts with label Wage. Show all posts

Monday 21 February 2022

More opportunities for job seekers


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KUALA LUMPUR: The JaminKerja Keluarga Malaysia initiative will support the government’s goal of reducing the unemployment rate by providing 600,000 job opportunities this year, says the Prime Minister.
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Datuk Seri Ismail Sabri Yaakob said these would be provided via an allocation of RM4.8bil, which is a key thrust under Budget 2022 on job creation.
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“The JaminKerja Keluarga Malaysia initiative is the manifestation of the government’s commitment to providing more employment opportunities and more sustainable economic development to drive the country’s recovery efforts in a structured manner and to contribute towards strengthening the national labour market.
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“Malaysia is on the right track in its economic recovery efforts through the creation of more employment opportunities to fulfil the needs of the labour market,” he said at the launch of the JaminKerja Keluarga Malaysia initiative themed “Keluarga Malaysia, Makmur Sejahtera” and JaminKerja Keluarga Malaysia Career Carnival 2022 at the KL Convention Centre here yesterday.

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The JaminKerja Keluarga Malaysia (Malaysian Family Job Guarantee) initiative is a collaboration between the Finance Ministry, Economic Implementation and National Strategic Coordination Agency, Human Resources Ministry, Social Security Organisation (Socso) and Human Resource Development Corporation (HRD Corp).
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Also present at the launch were Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz and Human Resources Minister Datuk Seri M. Saravanan.
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The initiative consists of three main programmes, the first of which is the JaminKerja Employment Initiative that will be implemented by Socso with a target of providing about 300,000 job opportunities.
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The second is the Malaysia Short-Term Employment Programme (MySTEP) that will offer 80,000 job opportunities in the public sector, government-linked companies and strategic partners.
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The third is the Upskill Malaysia programme implemented by HRD Corp to provide practical skills training for job seekers to improve their marketability and provide guaranteed job placements.
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About 220,000 trainees will be targeted.
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Ismail Sabri said the JaminKerja Employment Initiative will also focus on efforts to encourage employers to hire especially individuals who were not actively working such as the unemployed, and vulnerable groups consisting of the disabled, former prisoners, the elderly and women who were unemployed for a long time.
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“This is to ensure that no group is left out,” he added.
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Ismail Sabri said once employers are given the incentive to hire, job seekers could use the MyFutureJobs platform to get job matches and fill the vacancies that are offered, adding that incentives will be given to employers who employ locals to fill jobs that used to be filled by foreign workers or expatriates.
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The government, he said, is committed to helping the entrepreneurial community, which hires and creates job opportunities, so that they could continue to grow and rebuild their business through the Semarak Niaga initiative worth RM40bil.
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The Prime Minister added that the Human Resources Ministry, too, has planned 312 open interview programmes and employment carnivals throughout the year.
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“The JaminKerja Keluarga Malaysia Career Carnival is the curtain-raiser for 2022 and is the first to be organised in the country, offering more than 12,000 job opportunities from 50 employers from various industries,” he said.
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To reduce the skills mismatch gap, Ismail Sabri urged the industry to implement better recruitment strategies by taking into account social changes including a more flexible work environment.
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“As the National Employment Council (NEC) chairman, I am confident that the efforts of the NEC in enhancing the momentum of job creation as well as boosting the job market will be able to continue through the JaminKerja Keluarga Malaysia initiative, which in turn will also strengthen the Malaysian Family household income, especially underprivileged groups, and the B40 and M40,” he said. 

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Friday 28 September 2012

Malaysia's minimum wage saga continues

AFTER all the debate between proponents and opposers and the accompanying fanfare which dragged on for years, the Human Resources Minister finally issued an order in July 2012, declaring that Minimum Wages need to be paid from January 2013.

While the intention was to ensure that all employees will be paid a certain minimum salary, RM900 in peninsular Malaysia, the way in which the order was worded has created problems and headaches for employers, not so much for those who are not paying the minimum wage of RM900 currently, but for employers whose current remuneration package for employees is far above that of RM900.

The blame for this rests squarely on the formulators of the law and the order.

This is further compounded by the recent issuance of so called “Guidelines – method of implementation of the Minimum Wages Order 2012”.

The National Wages Consultative Council Act, (the Act) under which the Minimum Wage Order has been promulgated, states that “wages” has the same meaning as that found in the Employment Act 1955.

“Wages” as defined in the Employment Act 1955 means basic wages and all other payments in cash payable to an employee for work done in respect of his contract of service but does not include the listed exclusions.

However, the Act has also provided a definition for “minimum wages”, to mean, the basic wages to be or as determined under the order made by the Minister under Section 23.

Section 24(2) of the Act goes further to state that where the basic wages in an employment contract is lower than the minimum wage rate as specified in the Minimum Wages Order the minimum wage rate (RM900) shall be substituted for the ‘basic wage’ in the employment contract.

There are many employers, who for a variety of reasons, provide a low basic wage but top up the remuneration package with a variety of other payments such as commissions, allowances, service charge, shift allowance and other payment in cash.

In many instances, the calculation of the additional payments are based on the current “basic wage”.

At the end of each month, these employees earn much more than the minimum RM900.

Often employers fix a low basic wage but pay high rates for other payments, the calculation of which, as mentioned earlier, is sometimes linked to the basic wage. They do so to encourage productivity.

They are not short paying their employees but that is how the wage payments are structured in the country with each industry having its own peculiar structure.

Many instances can be cited where employees paid as much as RM1,500 or even more per month.

The Minimum Wages Order requires that the “basic wage” be now moved up to RM900.

The introduction of minimum wages was never intended to affect these good employers but to compel the ones who pay below RM900 to raise the wages of their employees to a minimum level of RM900 per month.

The Minimum Wages Order in Para 6, however, goes on to suggest that employers and employees and where trade unions exist, could go about and re-negotiate a restructuring of wages before the coming into force of the order.

How on earth are employers, who do not have a union, going to go about this renegotiating with their employees? What if they disagree?

Would any employee or trade union in the right frame of mind agree to raise his current basic (which is lower than RM900) to the new figure of RM900 (thereby helping the employer to conform with the requirement of the Minimum Wages Order) and permit all the other benefits that he is receiving (which is related to the basic) to be lowered so that the end result is that he is placed at a position, (in terms of total remuneration received at the end of the month ) no different than the original amount that he is currently receiving?

The Minimum Wages Order has indeed created confusion in the labour market and that is putting it very mildly. Fortunately, the order comes into force only in January 2013, giving time for corrective measures.

In an attempt to provide some clarity and explanation to this confused state of affairs, the National Wages Consultative Council exercising the powers provided under Section 4(2) of the Act has decided that apart from the matters contained in the Minimum Wages Order 1212 it shall issue some guideline relating to the method of implementation of the order.

Nowhere in Section 4(1) (which refers to the functions of the council) are powers given to it to elaborate, explain, modify or issue guidelines relating to the method of implementing the Minimum Wages Order issued by the Minister under Section 23(1).

If at all the council wants to make any recommendations it could exercise the provision under Section 22(1)(e).

In such an instance it has to make its recommendations to the Government through the Minister.

The Minister, if he agrees with the recommendation, can then issue an order as provided for under Section 22(1). .

Clearly, the drafting of the Minimum Wages Order could have been done much more professionally bearing in mind the objective of the introduction of the minimum wage law.

It is still not too late to remedy the situation and help relieve the unnecessary turmoil the vast majority of employers are now facing.

Up till now so much management time has been lost trying to find answers to the hundreds of questions raised by law abiding employers in the different industries for which no one in the ministry has been able to provide clear-cut answers.

Needless to say, any law enacted must be simple, well drafted, easy to understand and achieve what it is set out to do.

If it creates problems, especially for those who ought not to be affected by it, then something is fundamentally wrong with it.

PETER RAIAPPAN Kuala Lumpur

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Friday 4 May 2012

Malaysia's Minimum wage’s benefits and effects

Minimum wage’s benefits are plenty

I HAVE been waiting for a reason to talk about a pizza delivery man I met in a lobby of an condominium while waiting for a lift to arrive. It was in the evening and he was delivering pizza to one of the residents. I struck a conversation about his job, his salary and his aspirations, and got enough from the chat to get his views that the decent salary he was making was insufficient.

The young man claimed he was making RM2,200 a month whizzing through traffic, despite the weather, to send piping-hot pizzas to customers from between 10am and midnight.

He said that after sending back money to his parents in Pahang and paying for his lodging and expenses to live in Kuala Lumpur, the salary was just not enough. Furthermore, the job was wearing him down and he wants to do something else, but is finding it hard to get a new skill with the demands of his current job and the obligations he has.

His story will resonate with many others who are struggling to make ends meet, and whatever little assistance they get will surely be welcome. That small bit of help though came for millions of Malaysians by way of a new minimum wage the Government announced on April 30.

Workers in Peninsular Malaysia were promised a floor wage of RM900 a month and those in Sabah, Sarawak and Labuan RM800 a month. The minimum wage will take effect six months from the time the law is gazetted to allow industries to make adjustments to comply with the new law. Non-professional services companies with fewer than five employees will be given a further six months to make their adjustments.

The higher minimum wage will benefit a reported over three million private-sector employees and the net effect economists have calculated is a negligible increase in unemployment and a small drop in investments.

Economic growth and the investments that will take place and the promise of new jobs will be more than enough to offset those small impediments.

One drawback many can expect is higher prices. You can bet employers will pass on the higher staff costs to customers, but the quantum should be kept in check given the competition that exists in business.

The benefits, though are plenty.

The higher wage that almost a third of the workforce will benefit from will be a boost to the economy, which in recent years has been driven by consumption.

The higher wages will also manifest in other benefits for workers. A higher base salary will mean higher contributions to the Employees Provident Fund (EPF) and the extra will go some way to shore up the retirement savings of many Malaysians.

Companies will see an increase in their payments to the EPF, but with productivity having risen 6.7% per year over the past 10 years and companies making a lot more money than before judging by profits announced by listed companies and tax collection by the Government, they can afford to pay a little more for their workers without diving into bankruptcy.

With a third of the workforce soon enjoying a higher base salary, the increased income will go some way to satisfy the requirement of banks under the new responsible lending guidelines.

Under the new loan criteria, banks will look at the basic salary and decide whether a person can afford a loan. With higher salaries, maybe that will be enough for low salaried people to qualify for a loan to get the small car or home they need.

The minimum wage will help those in need. It might help those like the pizza delivery man if the minimum salary together with allowances are fixed. It is a start that many Malaysians will be thankful.

Deputy news editor Jagdev Singh Sidhu needs to get a lucky charm ahead of this weekend's FA Cup final.

Minimum wage effects manageable


Effects of the minimum wage policy are expected to be manageable and unlikely to have a significant impact on companies, with rubber glove manufacturers seen to be the hardest hit, analysts said.

UOB KayHian Research head Vincent Khoo said there will be no significant wage rise for most listed companies, especially given the flexibility for the floor wage to include allowances and benefits, hence no wage restructuring is required.

"However, small and medium enterprises in particular, may still be impacted by higher overtime and there may be an upward cascade effect for some listed companies."

In terms of sector, he said glove manufacturing remains the most impacted but the effect should be significantly softened with the incorporation of some allowances into wage calculations.

"Minimum wages would lower industry profits by as much as over 10% as a significant portion of the industry's staff force earn only RM600 to RM700 a month before allowances and benefits."

Consumer companies emerge as the winner as overall demand for fast-moving consumer goods should improve with higher disposable income among low-wage earners.

"We expect manufacturers to raise product prices during the implementation grace period to maintain profitability," Khoo said.

Affin Investment Bank economist Alan Tan said: "The direct effect of a minimum wage increase will result in increases in the relative prices of goods produced. However, even if minimum wages were to lift prices (especially in low-wage industries), we expect the inflationary impact to be manageable, as the minimum wage is set at a relatively low level, which will not raise production costs and overall price level significantly.

"Overall, we expect the broader economic effects of minimum wage in the country on company profits, prices, and inflation, to be manageable and unlikely to have a significant impact on the economy."

However, CIMB Research said higher wages will release pent-up consumption, albeit with some inflationary impact.

"Our view is that an appropriate minimum wage could over time achieve a big push, which is moving the low-wage, low-consumption and informal labour market to a high-wage, high-consumption and formal labour market."

For rubber glove makers, HwangDBS Vickers Research said staff costs would increase by 17-22% while earnings could fall by 5-19% .

"We expect the additional staff costs to be passed to customers over time, but in the immediate term, we expect earnings and margins to be dampened."

It said Hartalega Holdings Bhd is the least affected while Top Glove Corp Bhd would be most affected.

"Based on our estimates, Hartalega's salary costs could rise by RM10 million a year, an increase of 17% and this would lower the 2013 estimated net profit by 5%. For Top Glove, staff costs could rise as much as RM39 million (an increase of 22%), denting 2013 earnings by 19%. Meanwhile, we estimate Kossan Rubber Industries Bhd's annual salary costs to increase by RM18 million (a rise of 17%) and net profit to fall by 13%."

However, it said that if fixed allowances or cash payments are allowed in the calculation for minimum wages, the impact will be softened.

It maintained a hold on Top Glove at a target price of RM4.80 and Hartalega (RM7.70) and Kossan (RM3.30).

Affin Investment Bank said rubber glove makers have indicated that they will most likely reduce or re-categorise certain allowances to help offset the increase in their workers' basic salary.

Ee Ann Nee
sunbiz@thesundaily.com


Glove makers to gain from wage rule in long run


PETALING JAYA: While the new minimum wage will dent glove makers’ earnings in the near term, it is expected to be beneficial for the industry in the long run, CIMB Research said.

“It will encourage glove makers to reduce their use of low-skilled labour and improve their manufacturing processes by using more advanced technology and methods.

“Also, we believe that wage inflation will make the smaller glovemakers less competitive and catalyse consolidation in the sector. This will strengthen the positions of the large glove makers, favouring those with more efficient processes such as Hartalega (Holdings Bhd),” the brokerage said in a note to clients.

On Monday, Prime Minister Datuk Seri Najib Tun Razak announced the details of the country’s wage floor for the private sector, with the monthly benchmark set at RM900 for Peninsular Malaysia and RM800 for Sabah, Sarawak and Labuan.

This translates to an hourly rate of RM4.33 and RM3.85 respectively.

Some analysts say the new minimum wage rule may encourage glove makers to reduce their use of low-skilled labour and improve their manufacturing processes by using more advanced technology and methods.

The policy applies to all workers in the private sector, save for those in domestic services, but it will only take effect six months after the Minimum Wages Order is gazetted.

The law, which will be reviewed every two years, affords some flexibility to employers as they can absorb a certain amount of allowances and fixed cash payments in calculating the new wages.

According to CIMB Research’s forecasts, the minimum wage could shave some 1% to 7% off glove makers’ financial year 2013 core net profit, but the brokerage has kept its “neutral” rating for the sector and estimates for the companies under its coverage as they may yet find ways to mitigate the impact of higher staff costs.

Other research houses have also maintained their ratings pending further clarification from the companies and the actual gazetting of the law.

Among the glove makers, Hartalega is the least affected by the setting of a wage floor due to its highly automated production facilities and high margins relative to its peers.

“We believe Hartalega will emerge the strongest from the higher wages as its operations are already lean and management is working hard to further automate its manufacturing process.

“With the highest margins (lowest post-tax cost base), technologically advanced manufacturing process and an aggressive eight-year expansion plan, Hartalega has the most wiggle room in the sector to price gloves competitively and gain market share,” CIMB Research said.

Management was aggressively working on further automating the stripping and packaging portions of its manufacturing process to reduce the use of low-skilled labour and optimise operating expenditure, it added.

CIMB Research said Top Glove Corp Bhd would be the hardest hit as a result of low margins and an oversupply for its gloves that could take two to three years to work off.

“We believe it would be challenging for management to pass on the cost of the minimum wage to customers. This would put further pressure on margins and Top Glove’s high-volume low-price model.”

Top Glove shares have reflected this, with the counter losing 13 sen, or 2.72%, to RM4.65, making it one of the day’s top losers.

In contrast, Kossan Rubber Industries Bhd and Supermax Corp Bhd dipped one and two sen respectively to RM3.24 and RM1.87 yesterday, while Hartalega was unchanged at RM7.80.

For Supermax, CIMB Research said the manufacturer was ramping up nitrile production to 53% of capacity by financial year 2013. This could help curb rising staff costs, the brokerage added, as the cash cost of producing nitrile gloves was 20% lower than natural rubber.

Kossan, meanwhile, is poised to tap on the growth in China, where glove usage is a mere two gloves per person per annum versus 50 in Europe and 96 in the United States. Kossan entered the market in financial year 2012 via its 53%-owned Cleanera HK Ltd.

Moving forward, HwangDBS Vickers Research expects the additional staff costs to be passed on to customers over time.

Affin Investment Bank, in a report, also noted that Top Glove had previously said it would likely pass on 80% to 90% of the higher costs by increasing prices, which could prompt other glove makers to do the same. - The Star Business

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