How will the RM1,700 minimum wage affect small firms with under five workers?

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Minimum Wage Adjustment for Small Firms Set for August 2025 Implementation

Malaysia's minimum wage is scheduled to increase to RM1,700, with this revised rate set to be implemented on August 1, 2025, for companies employing fewer than five individuals. This adjustment marks an escalation from the RM1,500 minimum wage that was initially established in May 2022. The RM1,700 figure is designated as a foundational minimum, distinct from a target remuneration for newly recruited employees.
Delayed Implementation for Micro-Enterprises

The stipulated effective date of August 1, 2025, specifically applies to businesses classified as having fewer than five employees. This phased approach to the minimum wage increase distinguishes these smaller entities from larger corporations, which will see the RM1,700 minimum wage take effect earlier, on February 1, 2025.
Minimum Wage as a Baseline

It is important to note that the RM1,700 minimum wage is intended to function as a baseline standard. The announcement clarifies that this figure represents the lowest acceptable wage and is not to be construed as a target salary for individuals entering the workforce or for recruitment purposes.
Preceding Minimum Wage Rate

Prior to this forthcoming adjustment, Malaysia's minimum wage stood at RM1,500. This rate was put into effect in May 2022, serving as the prevailing minimum remuneration for all employees across the nation until the new schedule begins in 2025.

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How will the RM1,700 minimum wage affect small firms with under five workers?

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