Human Resources Minister Steven Sim has clarified that the RM1,700 monthly minimum wage should not be used as the benchmark for graduate starting salaries or entry-level professional roles. He said the minimum wage under the Minimum Wage Order is intended as a basic wage floor for the lowest-skilled positions and does not reflect market rates for roles requiring higher qualifications or specialised skills.

Understanding Malaysia’s Minimum Wage Order

Malaysia’s minimum wage framework is set through the Minimum Wage Order, which is reviewed periodically by the National Wages Consultative Council. The RM1,700 rate was announced under Budget 2025 and began implementation nationwide on 1 February 2025. It represents the lowest legal monthly wage employers may offer and serves as a safety net to protect workers in basic roles.

The minimum wage is not designed to guide starting salaries for skilled work. Sim explained that treating RM1,700 as an appropriate starting salary for graduates misunderstands the purpose of the policy, which focuses on wage protection rather than job complexity or professional expectations.

Sector-Based Wage Guidelines Provide Reference Points For Skilled Roles

To support fairer and more transparent salary negotiations, the Ministry of Human Resources has introduced sector-based wage guidelines[PDF]. These guidelines outline typical starting salary ranges for a broad range of professions, including engineering, design, media, technical services, healthcare, and administrative roles.

The figures are based on factors such as education requirements, job responsibilities, industry norms, and expected skill levels. Although the guidelines are not mandatory, they act as a reference point for employers and help jobseekers understand the usual starting range for their field. Sim noted that this can prevent graduates from being anchored to minimum wage levels in industries where salaries should naturally be higher.

How The Progressive Wage Model Supports Long-Term Salary Growth

Sim also highlighted the government’s progressive wage model, which promotes structured wage development by linking salary progression to improvements in skills and productivity. The model provides subsidies, incentives, and training opportunities for companies that participate, helping employers gradually increase wages in a sustainable manner.

The progressive wage model complements the minimum wage and sector-based wage guidelines by encouraging clearer career pathways and addressing wage stagnation. Its phased rollout is designed to give employers time to adjust workforce development and training strategies.

Graduate Labour Market Trends And Salary Expectations

Sim’s remarks also reflect broader trends observed in Malaysia’s labour market. Recent releases from the Department of Statistics Malaysia (DOSM), including its Graduate Statistics publications, show that starting salaries differ widely across industries. Technical, engineering, financial, and information technology fields tend to offer higher entry-level pay compared with creative, service-based, or administrative roles.

DOSM data also highlights persistent graduate underemployment, where many degree holders work in jobs that do not fully match their qualifications. The Khazanah Research Institute has similarly documented a substantial share of graduates in jobs that do not match their skills. Meanwhile, Bank Negara Malaysia notes that although labour productivity rose in 2024, wage growth remained modest, which suggests that wages have not been rising in line with productivity gains. These findings highlight the need to distinguish between minimum wage protection and appropriate salary levels for skilled or professional positions.

Ensuring Fair Salary Practices For A Stronger Workforce

Sim urged employers to set salaries responsibly and align them with job requirements, qualifications, and the value contributed by the role. He emphasised that graduate and skilled starting pay should not be anchored to the minimum wage but should instead reflect industry standards and the nature of the work.

He also reminded companies that profitability should lead to fairer distribution of gains among employees. While healthy profits are important for business sustainability, Sim said companies should consider how their success is shared across the workforce once the organisation performs well.

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