Malaysian firms cut workforce following wage hike decision
KATHMANDU, Nov 6: Nepal is receiving fewer job offers from Malaysia as companies there are reducing workforce in a bid to contain their operating cost after the Malaysian government hiked minimum wage for workers.
Issuing the Minimum Wage Order 2012 recently, the Malaysian government increased minimum wage for workers to 900 Ringgit (excluding overtime allowances) for Peninsular Malaysia.
Similarly, it has set minimum wage at 800 Ringgit for Sabah, Sarawak and the Federal Territory of Lebuan effective from January 1, 2013. The new wage structure will come into will be effective from January 1, 2013. Small firms employing five or less workers must implement it by July 1, 2013.
“Minimum wage payable to employees may not be reduced by more than 30 percent during the probation period,” states the order.
Minimum salary for migrant workers, including Nepalis, in Malaysia currently stands at RM 546 per month (excluding overtime allowances).
Nepali workers who are currently earning around 1,000 Ringgit (including overtime and other allowances) per month will be able to earn 1600-1800 Ringgit per month after the new wage structure comes to effect.
Kumud Khanal, first vice-president of Nepal Association of Foreign Employment Agencies (NAFEA), said Malaysian firms have started to cut down the number of workers and lower the demands for workers for new recruitment.
“Our client China Press in Malaysia has reduced the demand for Nepali workers from 100 to 50, citing minimum wage hike by the Malaysian government,” Khanal said. “We will lower number of demands for Nepali workers as local employers are worried about the possible rise in their operating cost following the review in minimum wage,”
China Press is not the only Malaysian company to reduce number of job offers. According to Khanal, other Malaysian firms are also reducing the demands for workers to contain their operating cost. “Some companies are planning to reduce their workforce.”
He, however, said the fresh hike in wage will not affect overall remittance inflow from Malaysia.
Around 300,000 Nepalis are working in different Malaysian companies. They are estimated to send home around Rs 50 billion a year.
Officials at Nepali embassy in Kuala Lumpur also expect the demand for Nepali workers to drop after the new wage structure comes to effect. “Malaysian employers are planning to reduce their workforce to contain their operating cost. We also expect the demand for Nepali workers to drop which will eventually affect remittance inflow to Nepal,” Amal Kiran Dhakal, labor attaché at Nepali Embassy in Malaysia told Republica on Monday.
Malaysia, the most popular job destination among Nepalis, received 40,633 workers during the first quarter of the current fiscal year 2012/13.