HR minister warns employers: Don’t peg fresh grad pay to RM1,700 floor, lowballing drags down entire wage structure

HR minister warns employers: Don’t peg fresh grad pay to RM1,700 floor, lowballing drags down entire wage structure

KUALA LUMPUR, Dec 1 — Employers should not use the RM1,700 monthly minimum wage under the Minimum Wage Order (MWO) as the benchmark for starting salaries for graduates or new entrants to the workforce, Human Resources Minister Steven Sim said today.

According to Astro Awani, he said the misconception must be corrected, noting that the minimum wage serves only as a “safety net” for the most basic and low-skilled jobs.

“I always say the minimum wage is not a starting salary.

“It is unreasonable for university graduates to assume their starting pay should be around RM1,700 when that rate is set for the most basic roles,” he said in a speech at the signing of the 14th Collective Agreement (CA) between Genting Malaysia Berhad (GENM) and the Genting Malaysia Employees Union at Wisma Genting here.

Sim said the ministry has introduced sector-based wage guidelines as an official reference for employers and employees during salary negotiations.

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The guidelines outline starting salary scales for various professions — including civil engineers, graphic designers and journalists — who should naturally earn above the minimum wage.

“These guidelines are not mandatory, but they help negotiations. Fresh graduates attending interviews will have an idea of their salary range and won’t be misled.

“If we set the bottom too low, the salaries of those at the top and middle will also be affected. To lift wages across the board, the lower floor must be reasonable and respect human dignity,” he reportedly said.

Sim added that through the progressive wage model, the government is providing subsidies, incentives and skills-training opportunities to encourage companies to raise salaries gradually.

He also reminded companies to ensure profits are shared fairly.

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“Companies must make profits, otherwise workers lose their jobs. But once they are profitable, we cannot think only of shareholders. We must consider how those gains are shared with the entire workforce,” he added.