Why did the government delay the minimum wage for small businesses?

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Government Postpones Minimum Wage Increase for Small Businesses by Six Months

The government has decided to defer the RM1,700 minimum wage requirement for employers with fewer than five employees by a period of six months. This adjustment means that this specific group of employers will continue to adhere to the current minimum wage of RM1,500 per month, with the RM1,700 rate to be implemented for them at a later date. The broader increase in the national minimum wage from RM1,500 to RM1,700 per month is scheduled to take effect for most employers on February 1, 2025.
Rationale for Minimum Wage Adjustment

Prime Minister Datuk Seri Anwar Ibrahim described the decision to raise the minimum wage to RM1,700 as a demonstration of the unity government's political determination. He indicated that leaving such decisions solely to companies would impede progress, suggesting a lack of consensus among businesses on the matter. The Prime Minister emphasised that with the country experiencing robust economic performance and significant investment inflows, a prosperous nation should not permit subpar treatment of its workers.
Implementation Timeline for Minimum Wage

The national minimum wage rate is set to increase from the current RM1,500 to RM1,700 per month. This revised rate is slated to come into effect on February 1, 2025. The government's decision to postpone the implementation for employers with fewer than five employees introduces a staggered approach to this policy change.
Broader Economic Context and Priorities

Anwar, who also serves as the Minister of Finance, highlighted that the government's focus is on people-centric initiatives, such as affordable housing, quality school facilities, and good healthcare, rather than solely on mega-projects. He stressed the necessity for all stakeholders, including civil servants, political leaders, and business individuals, to actively support smaller enterprises to prevent the exacerbation of wealth disparity. The Prime Minister also reiterated the government's commitment to accelerating efforts to eradicate hardcore poverty, noting the unacceptable reality of families struggling with basic necessities in a country with substantial revenue.

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Why did the government delay the minimum wage for small businesses?

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