Chamber appeals for leniency
Published on: Wednesday, January 02, 2013
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Kota Kinabalu: The new President of the Kota Kinabalu Chinese Chamber of Commerce and Industry (KKCCCI), Michael Lui Yen Sang, has appealed to the Government not to harshly enforce the minimum wage policy and to allow some leeway for businesses to adjust gradually to the policy.
"Everyone (bosses) is scared of the enforcement. The unaffordable unskilled or surplus workers will face retrenchment, leading to higher unemployment, which will affect the whole country," he said.
"For example, a company having 10 workers may have to let go four or five workers and the remaining workers to be paid minimum wage will have to do more work to cover the tasks vacated by the other retrenched workers within the same working hours," he explained.
A survey conducted among small and medium enterprises (SMEs), which constitute more than 90 per cent of business entities in Sabah, showed the minimum wage has "instigated" demands from longer serving staff envious of unskilled workers having their pay increased to RM800, in accordance with the law, effective this month.
Voicing concern over this development, Lui, who seeks to attract more businesses, professionals and young entrepreneurs to join as new members and strengthen KKCCCI, expects 2013 to be a "tough year."
"For instance, some companies with longer-serving staff want parallel salary increment of RM200 if the unskilled or inexperienced staff being paid RM600 in 2012 are to be paid RM800 minimum wage in 2013.
"These experienced employees demand this same increment out of fairness and equal treatment from employers in recognition of their key roles.
It is not easy to find good staff nowadays. Those who can afford it would probably pay. It is worrying for those companies that are hard-pressed financially to fulfil such expectations. It will affect everybody," Lui said of the increasing business costs not solely arising out of the minimum wage but also parallel salary increment demanded by other employees earning more than RM800.
Concerned over increased business costs faced by firms in 2013, Lui appealed for understanding and leniency from the authorities against harsh enforcement of the minimum wage law in Sabah without a grace period.
He also expressed concern over possible retrenchment arising out of this minimum wage policy and its larger social implications. Only firms with less than five employees could apply for deferment until June 2013 for delaying in paying the minimum wage.
KKCCCI Executive Secretary, Loh Boon Hooi, said the chamber attended many committee hearings in Kuala Lumpur last year and submitted its minimum wage (around RM600+) suggestion and inputs.
These included workers' efficiency, dividing wage calculations into various sectors to be implemented gradually with other organisations such as manufacturers and other trade associations.
The chamber had also sent out circulars to members with less than five workers on the deferment but none had asked the chamber to assist on the matter, Loh said.
KKCCCI new Secretary-General, Yee That Hian, a pharmacist, also echoed what Federation of Sabah Manufacturers (FSM) President Datuk Wong Khen Thau said about the difficulty faced by firms in applying for the deferment.
"The need to submit comprehensive documents like a full set of audited accounts and so on in order to apply and qualify for the deferment, which is not easy.
"How long is the deferment? Three months? Six months?
The most is six months. Is it worth it?" Yee pondered over the tough bureaucratic hassle for small business operators to expend time and energy over such matter for a very limited timeframe of exemption.
Yee was concerned about KKCCCI members having problems over the minimum wage as factories with many workers to be paid minimum wage of RM800 face huge increase in costs.
"It is not that the chamber has not done anything on this matter which was not publicised.
There was a consensus that the minimum wage should be implemented gradually like 10 per cent every year and not across the board on Jan 1 giving our members time to adjust and plan their budget."
"Singapore started minimum wage policy and implemented it gradually until it reaches a high income society. We also need time to adjust gradually," Yee explained.
