Lower bonus, pay rise for private sector, says survey

Publication: NST

Date of publication: Dec 30, 2013

Section heading: Main Section

Page number: 004

Byline / Author: By Tharanya Arumugam; Fazleena Aziz

PRIVATE-SECTOR employees will see a lower salary increment next year because of the minimum wage policy and retirement age limit, said the Malaysian Employers Federation (MEF).

Its executive director, Shamsuddin Bardan, said the lower forecast was also due to the increase in power tariff rate affecting companies.

Lower salary increments and bonuses would affect executives and non-executives.

"Companies are feeling the pinch due to increases in the cost of doing business. They are cautious in handling revenue as it may be difficult to meet their target next year.

"Employers have to adjust to the full impact of the new electricity tariff rate and minimum wage implementation."

Shamsuddin said companies were in the dark about the implementation of the goods and services tax (GST) at six per cent from April 1, 2015, which could affect increments for employees as well.

Executives can expect a 5.63 per cent average increase in salaries and 5.65 per cent for non-executives, according to an MEF survey.

The average salary increase for non-executives last year was at 6.78 per cent, slightly higher than that of the executives at 6.31 per cent due to the implementation of the minimum wage policy.

In terms of bonus payments, the MEF Salary Survey for non-executives and executives 2013 highlighted that the average forecasted bonus for executives for next year was 2.21 months. This was lower than the 2.26 months of actual bonus granted this year.

The forecasted bonus for non-executives was 2.13 months for next year, which was higher than 2.05 months of actual bonus given last year.

MEF survey was conducted with 257 companies taking part involving more than 13,000 employees.

Effective next year, the minimum wage for the peninsula is set at RM900 while for Sabah and Sarawak it is RM800.

However, Malaysian Trades Union Congress president Mohd Khalid Atan said the implementation of the minimum wage in January next year should not be a deterrent factor for increment, promotion and bonus for private sector employees.

He said the minimum wage was a policy implementation by the government that was long overdue to help employees.

"The minimum wage and retirement age limit are different issues compared to what the company is supposed to give, such as annual increments or bonuses. It is not right to use the minimum wage or retirement age as an excuse.

"However, it is a subjective matter to forecast how much or who should get increment, promotion and bonus as it was upon the discretion of the company bound by the performance of the employees."