A total of 51,363 workers have benefited from the Progressive Wage Policy, known as Dasar Gaji Progresif, as of 31 December 2025.

Deputy Human Resources Minister Datuk Khairul Firdaus Akbar Khan said 5,910 employers had applied to participate in the scheme, with 4,025 of them, or 83.4%, implementing wage increases in line with the policy’s incentive conditions.

Wholesale And Retail Sector Leads Participation

The wholesale and retail trade sector, including motor vehicle and motorcycle repair, accounts for the largest share of incentive claims at 26.7%. This is followed by manufacturing at 15.7%, professional, scientific and technical activities at 11.1%, and education at 7.4%.

The Progressive Wage Policy is designed to promote structured wage growth in the private sector by offering financial incentives to employers that commit to raising wages and strengthening skills development.

Entry Level Workers See Higher Median Wages

The ministry reported measurable wage growth under the policy, with entry-level workers recording some of the strongest increases. As of the end of 2025, the median wage for employees with 12 months’ service rose by RM300, from RM1,900 to RM2,200, representing a 16% increase, while employees with more than 12 months’ service saw median wages climb by RM238.85 to RM2,999.15, or about 11%.

Khairul Firdaus said the figures indicate that the policy encourages employers to adopt structured wage progression while improving worker motivation and productivity.

He was responding to a question from Senator Datuk Abdul Halim Suleiman on the policy’s effectiveness and private sector compliance during the Dewan Negara’s oral question-and-answer session.

Implementation Challenges During Rollout

In response to a supplementary question from Senator Dr Wan Martina Wan Yusof, the deputy minister acknowledged challenges during the two-year rollout period.

These include difficulties in meeting the 6% minimum wage increase requirement, low compliance with training components among smaller employers, and limited awareness of available online training platforms.

The Progressive Wage Policy began as a pilot project from June to August 2024 with an allocation of RM50 million before moving into full implementation. The programme now requires RM300 million in funding and is expected to benefit more than 50,000 workers by 2027, as outlined in Budget 2025.

What The Policy Signals For The Wider Workforce

If you work in an office, a bank, or a professional services firm, the Progressive Wage Policy may not directly affect your pay. The policy primarily targets lower-income workers, and the revised RM2,200 median entry-level wage benchmark is likely below many white-collar starting salaries.

However, the figures offer insight into broader wage dynamics. A 16% structured increase in median entry-level wages suggests that targeted policy interventions can shift baseline pay expectations within specific sectors. Over time, sustained upward movement at the lower end of the income scale can influence overall wage benchmarks, particularly in industries competing for talent.

For higher-income workers, the more relevant question is how their own salary growth compares with broader labour market trends. Malaysia has faced long-standing concerns around wage stagnation across income levels, and structured wage policies form part of a wider effort to address that. While the direct financial impact may be limited to participating sectors, the underlying signal about wage progression is relevant across the workforce.

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