Heck not even a week into the new year and news like this have surfaced: Click for article by The Malaysian Insider The article basically talks about how our economy is causing a lot of companies to close down and a lot of people to get laid off. But while this is generally a tough time for everyone, one particular group may be getting it harder than everyone else:
It also exa mines the Malay Sian labo ur mark et situation a nd trends in salary and wage administration together Malaysian employers federation mef essay the role of unions in compensation determination.
Tell us what you need to have done now! Prior to July 7, Asia was seen as a region exemplifying success in economic growth and development. Howev er, Mala ysia could no t shield itself from being negatively impacted by the Asian Financial Crisis where the nation suffered a 7.
InM alaysia had a workforce defined as persons between years old of slightly above 9 million.
Union members accounted for about 8. Untilthe salary and wage rate in the country had experienc ed a significant g rowth. Th is was a esult of the rapid econom ic growth and near p erfect emp loyment.
T his paper will discuss the salary and wage practice in Malaysia. It will begin by describing the legal framework for wage and salary determination.
It will then describe the Malaysian labour market and trends in salary and wage administration in the country. An examination of the role of unions is also included.
The following payments, owever, are no t included as part of wages: The value of any house accomm odation, the supply of any fo od, fuel, light or water, and medical attendance. Traveling allowance or the value of any traveling concession.
Any sum payab le to emplo yees to defray s pecial exp enses entailed on them by th e nature of the ir employm ent. Under the Act, payment of wages must be mad e no later than the 7th day after the last day of a wag e period.
A wage period mu st not exceed one mon th, and unless this period is specified in a contract of service, it is deemed to be one month. That is, employees are paid at least once a month. Employers, however, may pay wages at shorter intervals, say once a w eek or on ce every two weeks.
The Act specifies that when an emplo yer terminates an employee without notice, the wages owing to the employee must be paid no later than the day the service is terminated. If it is the employee who terminates the service without notice, payment ust be made within 3 days from the day of such termination.
If termination is with notice by either the employer or employee, wages must be paid by the end of the notice period. The Employment Act does not govern every aspect of wages.
For example, wage rates or levels are not regulated by the Act but are determined through negotiations between an employer and an employee or, in the case of unionized companies, between the representa tives of the company and the trade union.
However, wage determination for some employees, such as hotel and restaura nt workers, ar e subject to the minimum wage requ irements of the Wage Councils Ordinan ce In one Industrial Court case, the Court determined that in fixing wage levels, employers should a com pare their wage levels with that of sim ilar or related industries; b consider whether their wage levels are fair, giving due meet such wage levels.
In another case, the Industrial Arbitration Tribunal stated that due consideration should be given to the following factors in determining wage and alary levels and increases: In addition, the T ribunal op ined that emp loyers should consider fac tors such as lab or prod uctivity, prevailing wage rates in similar industries in the same region and the present economic condition as well as the future prospects of the industry in determining wage levels Ayadurai, One noticeable shift was the reduction in the percentage of the work force employed in the agriculture sector.
Data published by The Labor Force Survey Report by the Department of Statistics shows that certain sectors experienced significant changes in their share of total employment between refer to Ta ble 1.
The biggest increase was experienced by the manufacturing sector, which saw its share of total employment rise from Major increases we re also experienced in the construction sector and the sectors c lassified as financial, insurance, real estate and business services.
The property boom during this period led to the increase in the percentage of people employed in the construction sector. The growth in this sector needed to be supported by the fin ancial service sector which explains the increase in the finance, insurance, real estate nd business services sector.
Pe rcentage o f Employme nt Accord ing to Sectors. Sector Agriculture, forestry, livestock and fishing 26 20 The main labor markets in the country are located in the major industrial areas refer o Table 2. The Klang Valley is the biggest ind ustrial area in the c ountry and c overs Ku ala Lumpur, the capital city, and the neighboring towns of Petaling Jaya, Shah Alam and the port town of Klang.
These three towns are located in the state of Selangor. The industrial areas in these states have be en developed mainly in the last years. At the southern tip of peninsula Malaysia is the JB industrial area. JB is the acronym for the own of Johore Baru which borders Singapore.
Many Malaysians in Johore Baru work in Singapo re. As such, the labor mar ket conditio n here is affected by the conditions in Singapore.An employee survey in by MEF (Malaysian Employers Federation) shows that % of analyzed Malaysian companies are having a performance based reward system. A reward system based on seniority, which would encourage employees to commit to the company, is not common in Malaysia.
The Malaysian Employers Federation (MEF) said that in the year alone, there were , unemployed graduates in Malaysia. The number does not include the ones that have just completed their Sijil Pelajaran Malaysia (SPM), diplomas, certificate programmes.
Annual surveys by Malaysian Employers Federation (MEF , ) report that the annual labour turnover rates for and were high, approximately 17 per cent and 16 per cent respectively. Another survey (Lim ) reports that Malaysian respondents are only willing to stay with their current organisations for less than three years.
Malaysian workers suffer from suppressed wages because of the influx of cheap foreign labor, but having a minimum wage according to the Malaysian Employers Federation (MEF) would hurt Malaysian’s competitiveness due to the increase in costs firms will have to incur.
Malaysian Employers Federation (MEF) development along which the Federation of Malaya has chosen to travel is that of a private enterprise economy operating within the policy laid down by a democratically elected Government /5(6).
Source: Malaysian Employers Federation (MEF) The report showed that the turnover rate for non executives is much higher than executives and this is linked to low employee satisfaction.