RM2,000 minimum wage, new income framework to boost workers' earnings

KUALA LUMPUR: More than four million workers are expected to benefit from a 17.6 per cent increase in the minimum wage to RM2,000 a month from June 2027, Human Resources Minister Datuk Seri R. Ramanan said.

The RM300 increase from the current minimum wage of RM1,700 is part of the government's efforts to raise incomes, strengthen social protection and develop a more skilled workforce under Budget 2027.

"This is about raising incomes and strengthening social protection for workers," Ramanan said.

Micro, small and medium enterprises with annual sales below RM50 million will be exempted from the increase to give them time to adjust their business models.

Ramanan said the government would also introduce a new income framework setting a minimum wage of RM2,500 a month for semi-skilled workers and graduates.

"This is a new framework and we believe it will help ensure that semi-skilled workers and graduates are rewarded more fairly as they build their careers," he said in a statement today.

Government-linked investment companies and government-linked companies, he said, had committed to raising their living-wage benchmark from RM3,100 to RM3,400 a month, benefiting 230,000 workers.

Ramanan said the government wanted private employers to offer fairer wages based on productivity and contributions.

"We want the private sector to move in the same direction and offer fairer wages based on productivity and contributions," he said.

For gig workers, a RM160 million government-Grab joint financing package will be introduced in 2027 to support e-hailing drivers and p-hailing riders. It will cover minimum earnings, vehicle maintenance, insurance and Social Security Organisation (Perkeso) contributions.

Ramanan said the Gig Consultation Council was also negotiating minimum earnings rates, income formulas and social protection standards, with arrangements expected to be finalised in early 2027.

A 70 per cent incentive will be offered to over 200,000 self-employed people in 17 sectors where contributions are not mandatory.

E-hailing and p-hailing workers will also be eligible for matching Employees Provident Fund contributions of up to RM600 a year, subject to a lifetime limit of RM6,000.

Ramanan said the measures reflected the government's efforts to extend social protection beyond traditional employment.

"Gig workers must not be left behind as the nature of work changes. They too need access to social protection, retirement savings and fairer income arrangements," he added.

On skills development, RM8 billion has been allocated for technical and vocational education and training across ministries.

Ramanan said HRD Corp would use RM3 billion in levy funds to support three million training opportunities, while over RM40 million would be allocated to train 8,000 Malaysians for jobs in elderly care.

"These investments are necessary to prepare Malaysians for the jobs of the future.

"We need a workforce that is skilled, adaptable and ready to take on new opportunities," he said.

He said TalentCorp would facilitate Employment Pass applications for listed Malaysian Asean Business Entity companies, targeting a processing period of five working days.

The Bakat Madani programme, Ramanan said, would be expanded to provide 30,000 training and quality employment opportunities in 2027. Private companies running the programmes would be eligible for tax deductions from June 29, 2026, to Dec 31, 2030.

The allocation for the Malaysian Indian Community Transformation Unit would also increase by RM50 million to RM150 million, with priority given to skills training and jobs in industrial automation, technology and aircraft maintenance.

The government would fully fund Perkeso contributions for 40,000 imams, bilals, mosque attendants and religious teachers through Tabung Haji.

"Our focus is clear: to raise household incomes, expand access to quality employment and ensure that Malaysian workers are prepared for technological and industrial changes," he said.