Recently, the Malaysian government announced an important decision to raise the national minimum wage standard from the current RM1500 per month to RM1700 starting from February 1, 2025. Behind this decision is a direct call from foreign companies to increase labor costs.

Malaysia's Minister of Investment, Trade and Industry, Zavlu, revealed this news to the media after a recent departmental meeting. He stated that the government made this decision at the request of some foreign companies. These companies have explicitly stated that they will not choose to invest here if Malaysia does not raise its minimum wage standards. Minister Zavlu's statement undoubtedly reveals the importance that foreign companies attach to labor costs and employee benefits when choosing investment locations.

In fact, the Malaysian government had already had in-depth meetings and discussions with all relevant parties before announcing this decision. Minister Zavlu stated that these discussions have received a positive response, with most companies expressing understanding and support. However, for micro and small and medium-sized enterprises, this decision undoubtedly brings certain pressure. In order to alleviate the concerns of these enterprises, the government has decided to give them a six-month buffer period. Specifically, companies with fewer than five employees can postpone the implementation of the new minimum wage standard until August 1, 2025.

As early as 2014, Malaysia began implementing a minimum wage system, with the minimum wage standard in West Malaysia being RM900 per month and RM800 in East Malaysia. In 2016, the minimum wage standard nationwide was unified at RM1000. In May 2022, this standard was once again raised to RM1500. Now, with the implementation of the new minimum wage standard in 2025, labor costs in Malaysia will once again experience a significant increase.

In addition to the adjustment of the minimum wage standard, the Malaysian government also faces challenges in human resources issues such as foreign labor. Interior Minister Saifuddin stated in a recent statement that the current number of foreign workers in the country is approaching the government's maximum limit. Therefore, the government has decided to continue freezing new applications for foreign labor. This decision will undoubtedly have a profound impact on Malaysia's labor market, especially in some industries that rely on foreign labor.

There have been mixed reactions from various sectors of society regarding the adjustment of the minimum wage standard. Some companies have expressed concerns that this will increase their operating costs; However, other companies have expressed support, believing that this will help improve employee productivity and work motivation. For employees, this decision will undoubtedly bring better welfare benefits and higher living standards.