THE Government is reviewing its RM1,700 monthly minimum wage to determine whether the current rate should be retained or raised, with the Government considering living-wage benchmarks alongside broader economic and labour-market indicators.
Human Resources Minister Datuk Seri R. Ramanan said the review was being carried out in accordance with Section 25 of the National Wages Consultative Council Act 2011 (Act 732), with the final decision expected after the National Wages and Gig Economy Consultative Council (MPGGN) completes the process of determining a new rate.
He said the review would consider basic indicators including the Poverty Line Income (PGI) and median wages to assess workers’ basic needs as well as employers’ capacity to pay.
The rate would also be adjusted based on the Consumer Price Index (CPI), labour productivity and the unemployment rate, he said.
“So far, the ministry has not conducted a specific study on the living wage. However, Bank Negara Malaysia introduced the concept of a living wage in 2018, estimating, for example, that a living wage in Kuala Lumpur would be RM2,700 for a single individual.
“The Decent Living Basic Expenditure (PAKW) introduced by the Department of Statistics provides more granular figures based on location, demographics and actual household spending patterns.
“The Thirteenth Malaysia Plan (RMK13) also outlines labour market reform strategies, including accelerating wage adjustments through minimum wage reviews that take into account the living wage, which will be recommended to the Government for the next minimum wage,” he told Utusan Malaysia yesterday.
The current minimum wage of RM1,700 a month came into force in August 2025, following the Government’s practice of reviewing the rate once every two years.
Ramanan said the Government had also introduced the Progressive Wage Policy (DGP) as a complement to the minimum wage and productivity-based wage systems, to shift the wage structure from a basic wage floor towards pay that reflects workers’ skills.
He said 5,910 employers had applied through the Progressive Wage System, with 4,025 employers, or 68.1 per cent, having raised workers’ wages and submitted claims for Progressive Wage incentives.
The initiative has benefited 51,363 workers, exceeding the initial target of 50,000 workers, he said.
The Government has disbursed more than RM73 million in Progressive Wage incentives, including about RM10.2 million for entry-level workers and RM62.9 million for non-entry-level workers.
“Registered companies that meet the requirements and criteria of the Progressive Wage Policy will receive incentives of up to RM200 a month for entry-level workers, defined as those who have been employed for up to 12 months, and up to RM300 a month for non-entry-level workers who have been employed for more than 12 months.
“The amount of incentives provided to companies will be determined by the Government based on the country’s fiscal position,” he said.
Ramanan said the policy was designed to raise wages and skills through a voluntary, incentive-based approach linked to productivity and open to Malaysian workers.
Under the Progressive Wage Policy, workers are encouraged to undergo recognised training to improve their skills and workplace efficiency, with participants required to complete at least 21 hours of training.
“Employers are encouraged to offer wage increases in line with improvements in skills, the adoption of technology and digital-based work practices.
“This approach not only increases productivity and the competitiveness of companies, but also accelerates the country’s transition towards a high-value digital economy,” he said.
At the same time, the ministry is encouraging employers to offer higher wages through the Productivity-Based Wage System, while strengthening union-based wage models through collective agreements.
“This policy not only aims to achieve more meaningful wage increases, but also serves as a mechanism to improve labour productivity, as wage increases under the Progressive Wage Policy are conditional on workers’ participation in recognised upskilling training,” he said. - August 18, 2026
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