# Malaysia labor and welfare policy reviews

> Live situation record from CLSTR: https://clstr.news/situations/malaysia-labor-and-welfare-policy-reviews
> Updated: 2026-09-29T11:48:32.000Z. Sources: 8. Developments: 2.

As part of preparations for Budget 2027, the Malaysian government is reviewing various labor and welfare policies. The Ministry of Finance is examining social protection, insurance costs, and service fee rates for e-hailing and p-hailing gig workers. In a recent development, platform providers including Foodpanda, Grab, and Halo have contributed over RM1.5 million to expand coverage under the Social Security Organisation (PERKESO) scheme, benefiting approximately 500 workers.

Regarding the national minimum wage, currently RM1,700, the Malaysian Cabinet has agreed to exempt micro, small, and medium enterprises (MSMEs) from upcoming increases to protect them from rising operating costs. Entrepreneur Development and Cooperatives Minister Steven Sim Chee Keong stated that the government intends to utilize alternative methods, such as wage subsidies under the Progressive Wage Policy, to ensure wage growth aligns with productivity.

Stakeholder reactions have been mixed. The Malaysian Employers Federation (MEF) supported the MSME reprieve to help manage costs and protect employment. Conversely, Samenta Pusat Chairman Datuk William Ng warned that a proposed increase to RM3,100 would be “extremely difficult” for many small businesses to sustain, potentially causing hiring freezes or closures. Additionally, former Finance Minister Lim Guan Eng has urged the government to exclude foreign workers from wage hikes and called for the abolition of the mandatory 2% Employees’ Provident Fund (EPF) contribution for foreign workers to reduce the financial burden on local employers.

## Claims

- The Cabinet agreed to exempt MSMEs from further minimum wage increases for now to protect them from operating cost pressures. (corroborated by 2 sources)
- The government will use wage subsidies under the Progressive Wage Policy to support MSME worker wages. (corroborated by 2 sources)
- Lim Guan Eng urged the government to exclude foreign workers from any future minimum wage increases. (corroborated by 2 sources)
- Lim Guan Eng called for the immediate abolition of the mandatory 2% Employees’ Provident Fund (EPF) contribution for foreign workers. (corroborated by 2 sources)
- The current national minimum wage in Malaysia is set at RM1,700. (corroborated by 2 sources)
- The Malaysian Employers Federation (MEF) backed the decision to exempt MSMEs from further minimum wage increases. (single source)
- Samenta Pusat Chairman Datuk William Ng stated that a proposed increase to RM3,100 would be difficult for MSMEs to sustain. (single source)

## Timeline

### 2026-09-29: Malaysia exempts MSMEs from upcoming minimum wage increases

Malaysia's Cabinet will exempt MSMEs from further minimum wage increases for now, opting for wage subsidies instead. Leaders also debate excluding foreign workers from future hikes to protect local businesses.

7 sources. https://clstr.news/cluster/malaysia-human-resources-minister-clarifies-minimum-wage-status

### 2026-09-20: Malaysia reviews gig worker protections for Budget 2027

Malaysia is reviewing insurance costs and service fees for gig workers for Budget 2027, while platform providers like Grab and Foodpanda contribute RM1.5 million toward social security coverage.

2 sources. https://clstr.news/cluster/malaysia-reviews-gig-worker-protections-for-budget-2027

---
Cite as: Malaysia labor and welfare policy reviews. CLSTR, https://clstr.news/situations/malaysia-labor-and-welfare-policy-reviews