In response to the news reports which quoted Chart 14 at page 43 of the Bank Negara Report 2018 on Real Minimum Monthly Basic Salary for Employees Recruited Without Prior Working Experience (2010 and 2018), MEF is pleased to make the following clarifications:
1. The Source of the Chart as quoted by Bank Negara Malaysia “estimates using data from MEF Salary Survey for Non Executives and Executives 2010 and 2018 published by Malaysian Employers Federation”.
It is important to note that BNM had used MEF salary data and converted to “real” terms which resulted in the starting salary for those with diploma, degree and masters degree had reduced over the years 2010 and 2018. The Bank Negara analysis of “real” wages may be useful for policy formulation but caused distrust and disharmony among employees and employers.
2. MEF Salary Survey for Non Executives and MEF Salary Survey for Executives for 2010 to 2018 reported the starting basic salary based on the data collected from participating member companies. The starting basic salary in the reports does not include overtime, payments for work done on rest days and public holidays, allowances, bonuses and other related payments. The Average Starting Basic Salary for entry level based on qualifications as reported in MEF Salary Surveys 2010 and 2018 were as follows:
3. The Chart and Table above show that the starting basic salary for employees without prior working experience as stated in the MEF Salary Survey for Non Executives and MEF Salary Survey for Executives had been gradually increasing through the period 2010 to 2018.
4. BNM has analysed and adjusted the MEF salary data to “real” terms, by taking into account factors such as Consumer Price Index. MEF states that when the actual salary data show that the starting basic salary for all categories including diploma, degree and masters degree holders were on the upward trend from 2010 to 2018, but was stated as otherwise in the BNM report, had put the Malaysian employers in bad light. Malaysian employers were blamed for not paying the newly employed enough starting basic salary. The reality is many of the Malaysian employers are facing endless challenges with ever increasing cost of doing business and margins keep on decreasing.
5. MEF is of the view that increases in starting basic salary should be based on company’s ability to pay and performance of the employee. In fact wages review for the national minimum wages are based on:
• Poverty line index,
• Consumer Price Index increase,
• Productivity growth, and
• Employers ability to pay
6. MEF reiterates that starting basic pay for various categories based on qualifications will only be applicable during the probation period which normally ranges from three to six months. In the event the probationer is able to prove that he or she is an asset to the organization the salary will inevitably be reviewed to a higher level to ensure that the employee stays with the employer.