Nepalis to gain as Malaysia hikes pay 65 pc
Year of Publication: 3 January 2013 | Republica
Publication Type: NEWS
Published by: CESLAM
Prabhakar Ghimire
The Malaysian government has implemented a raise of 65 percent in basic salary, benefiting millions of low-income workers including migrants, effective from New Year 2013, as part of the government´s drive to transform the country into one of the high-salary nations. Among those benefiting are Nepali workers in significant numbers.
The fresh salary hike has been enforced in line with the Malaysian government´s Minimum Wages Order 2012, published in the Federal Government Gazette. As per the hike, workers are to get a minimum salary of up to Riggit 900 (Rs 26,000) per month, up from Ringgit 546, in most parts of Malaysia.
“Remittance contribution of Nepalis working in Malaysia will go up significantly with the implementation of the salary hike,” Amal Kiran Dhakal, Nepal´s labor attaché for Malaysia, told Republica over the phone, Wednesday.
Dhakal said the salary of those recruited as general workers won´t be less than Ringgit 900 per month in peninsular Malaysia and Ringgit 800 in Sabah, Sarawak and the Federal Territory of Labuan. The new pay scale does not include subsistence allowance and overtime pay.
According to Dhakal, newly recruited workers will get 70 percent of total pay for a six-month probation period.
Kumud Khanal, vice-president of Nepal Association of Foreign Employment Agencies (NAFEA), estimates that the total remittance inflow from Malaysia will increase at least 40 percent following the raise in salary. Khanal, however, said the raise will force big employers, especially multinationals, to demand fewer workers and move towards mechanization from a labor intensive system.
“Though salary has increased by 65 percent, remittance volume will not go up accordingly as the demand for workers will decline, with employers trying to contain costs against the fresh increment in remuneration,” said Khanal, who is also proprietor of Fusion International that has been supplying workers mainly to Malaysia.
He said local employers have approached the Malaysian government, demanding extension of the deadline for implementing the pay hike by a few months.
In its Minimum Wage Order, the Malaysian government has given a preparation period till July 1 for the salary hike for firms hiring less than five workers.
“Workers in construction, plantations and manufacturing are among those benefited from the new hike as most workers employed as security guards have already been receiving a salary higher than the newly set minimum,” said Khanal.
As per Malaysian government estimates, around 3.2 million blue-collar workers are expected to benefit from the basic salary revision. However, those working in informal sectors such as domestic help and gardners will not benefit.
Malaysia - home to around 400,000 Nepalis workers- has received around 774,000 Nepali job seekers over the last one and half decades through formal channels. As per rough estimates, Nepalis workers send home at least Rs 80 billion annually from Malaysia.
Malaysia, the most popular among labor destinations, had received 98,367 or one-fourth of the total of 384,665 Nepalis who left for overseas work destinations during fiscal year 2011/12.
Published on: 3 January 2013 | Republica
GET IN TOUCH