Business groups warn against mandatory salary disclosure for SMEs

Business groups in Malaysia are urging the government to adopt a voluntary approach to salary disclosure rather than making it compulsory for all companies. The Small and Medium Enterprises Association (Samenta) and the Malaysian Employers Federation have expressed concerns that mandatory wage band publishing could negatively impact small and medium enterprises (SMEs).

William Ng, president of Samenta, stated that SMEs often utilize flexible pay structures based on individual skills rather than rigid grading systems, making blanket disclosure impractical. He warned that compulsory disclosure could allow larger corporations to benchmark against SME postings and outbid them by 10% to 20% to poach trained staff, potentially accelerating a talent drain from the sector.

Syed Hussain Syed Husman, president of the Malaysian Employers Federation, noted that while the federation supports wage transparency in principle, a mandatory regime would impose significant compliance costs on micro, small, and medium enterprises that lack the established HR systems found in larger companies.