New Minimum Wage Proposed Epf Contributions May Shutter Smes Warns Group

---

 
The SME Association of Malaysia said many businesses were still recovering from the impact of the Covid-19 pandemic.
PETALING JAYA: The expected increase in operational costs due to the raising of the minimum wage and the proposed mandatory EPF contributions for foreign workers may lead to some businesses folding, warns the SME Association of Malaysia.
Its president Chin Chee Seong said the wage hikes and proposed EPF contributions would burden small and medium enterprises.
Chin said the “fragile” businesses were still recovering from the impact of the Covid-19 pandemic.
“The sharp rise in operational costs could push struggling SMEs into insolvency, leading to widespread business closures and job losses,” he said in a statement.
Chin said SMEs could not absorb the additional costs or pass them on to customers, unlike large businesses.
Raising prices would risk alienating customers, resulting in lower revenue and shrinking profit margins, he said.
“It would further threaten business viability.”
Chin suggested that Putrajaya should allocate additional funds aimed at providing relief to SMEs, particularly in labour-intensive sectors, to help them comply with the new regulations without risking their financial viability.
He also mooted the introduction of government-sponsored programmes that provide SMEs with incentives to invest in employee training and upskilling, enabling them to offset wage increases with improved productivity and competitiveness.
“We stand ready to collaborate with the government in finding solutions that ensure a fair and sustainable balance between worker welfare and business survival.”
In his budget speech last week, Prime Minister Anwar Ibrahim who is also finance minister, announced that the government had agreed to raise the minimum wage from RM1,500 to RM1,700 a month, effective Feb 1, 2025.
Anwar said the government had decided to delay the implementation of the RM1,700 minimum wage for employers with fewer than five employees by six months until Aug 1, 2025. - FMT

---