The minimum wage order in Malaysia gazetted in July 2012 has since been revised four times. In the recent revision of the minimum wage, the rate was increased from RM1200 to RM1,500 per month effective 1 May 2020. In general, the minimum wage protects workers, especially the low-skilled and low-income groups. While still debatable, the minimum wage order is often seen as a tool to alleviate poverty and reduce income inequality. However, in the case of Malaysia, the minimum wage does not cover workers in informal sectors, and these are usually the lower-income group. The recent revision of the minimum wage in Malaysia has met with many challenges amidst the recent COVID19 pandemic. Businesses were severely affected in unprecedented ways. A higher minimum wage may impose higher costs for business owners resulting in rising costs of goods and services for consumers. The cost of living varies in different states or regions in Malaysia. Therefore, the minimum wage should be implemented and revised gradually and differ by region. In the long run, businesses can increase their productivity by tapping into the skills and knowledge of their workers to create innovative products and processes. It is the purpose of this narrative review to draw attention to the current issues surrounding the recent increase in wage policy in Malaysia, with particular emphasis on the challenges and the way forward.

Minimum wage, Malaysia, COVID-19 pandemic