2. Part 1: Introduction
Background
of Study
Significance Problem
of Study Statement
Scope of Objectives
Study of Study

3.  Minimum wage regulation had first been developed in New Zealand
(1896) followed by Australia (1899) and later by Britain (1909). ˡ
 Then, others countries followed suit in subsequent years; France
(1915), Norway (1918), Austria (1918), Czechoslovakia
(1919), Germany (1923), Spain (1923) and Belgium (1934). ˡ
 The definition of minimum wages in ILO in the Article 7 of the ILO
Convention No. 131 on Minimum Wage Fixing (1970) and its
accompanying Recommendation No. 135.
The lowest basic wage guaranteed by law as an attempt to put a
floor under the wages of a particular subgroup of the working
population („working poor‟).
The minimum wage should not be fixed at a lower rate than one
which would ensure the subsistence of the worker and his or her
family.
Malaysia has not ratified to this Convention
Source:
(1) ILO Minimum Wage Policy- An International Review of Practices and Problems, Gerald Sterr, ILO, Geneva, pp.1-2

4. Malaysia: Section 2 of the National Wages Consultative Council Act
2011 (Act 732)
“minimum wages means basic wages”
Under section 2 of the Employment Act 1955, the term “wages” means basic
wages and all other payments in cash payable to an employee for work
done in respect of his contract of service but does not include-
a) the value of any house accommodation
b) employer‟s contribution to any retirement scheme
c) any travelling allowance or the value of any travelling concession;
d) any sum payable to the employee to defray special expenses entailed on
him by the
nature of his employment;
e) any gratuity payable on discharge or retirement; or
f) any annual bonus or any part of any annual bones.

5.  The slow growth of wages relative to labour productivity (wage
rate increases about 2.6% annually compared to productivity
rate of 6.7%) – shows the suppression of wages, especially those
of low skilled workers inefficiencies in the labour market
 There were 30.6% (2010) of the total wage earners living on
basic wages less than RM720 per month! below the poverty line
income (PLI 2009)
Source: Poverty Line Income Report (2009)

6. Unskilled worker are underpaid : –
wages below poverty line < RM 720
Creates feeling of unhappiness thus affecting employees
performance and productivity
Source: http://www.nst.com.my Retrieved on 5th November, 2012

7. 1. To explore the awareness level
regarding the implementation of
minimum wage policy in Malaysia
among private sectors employees;
2. To identify employees perception
(whether it is positive or negative)
towards the implementation of
minimum wage policy;
To identify factors influencing
employees perceptions on the
implementation of minimum wage
policy.

8.  Focus on the employees perceptions towards the
implementation of minimum wage policy
 This survey on employees perceptions will be
targeted to 30 employees working in private
sectors in Shah Alam

9.  is regarded as the importance or relevance of conducting
study in this particular issue of employee perception
toward the implementation of minimum wage policy in
Malaysia.
 Benefits of conducting this survey:
- The government and the employers will be able to
understand the employees‟ stands and views on the
issue of implementing minimum wage in Malaysia
- The employees will be able to express their
whether it is positive or negative about the
minimum wage (the survey will serves as a platform
for the employees to express their opinions)

10. Part 2: Literature Review, Theoretical
Framework & Research Question
Definition of
minimum
wage
Minimum
Positive and wages
negative around the
perceptions world
Factors The implementation
influencing of minimum wage in
perception Malaysia
Definition of
perception

11. Definition of minimum wage
 Minimum wage is the lowest level of remuneration
permitted; the wage which in each country has the force
of law and which is enforceable under threat of penal or
other appropriate sanctions (International Labor
Organization , 1967)
 Minimum wage refers to the minimum sum payable to a
worker for work performed or services rendered within a
given period, whatever calculated on the basis of time or
output, which is guaranteed by law and which may be
fixed in such a way to cover the minimum needs of the
worker and his or her family, in the light of national
economic and social conditions (Thiagarajah, 2000)
Sources: 1. International Labor Organization (ILO) Convention – 168th Session in Geneva Feb-Mar 1967
2. Ram Thiagarajah, A Study on Minimum Wage Fixing in Malaysia - Malaysian Trade Union Congress (2000)

13. The Provisions on Minimum Wage was promulgated
by Ministry of Labour and Social Security on January
20, 2004 and enforced on March 1, 2004
There are more than one minimum wage exists in
China
•Different provinces/ regions have various level of minimum wages
•No national minimum wage exists
Up-ratings or adjustments of minimum wages are
jointly decided by the government, employer and
trade union representatives
•By Law, minimum wages in China are updated once in two years
•However, in practice the minimum wages are adjusted once a year
in most places
Source: Minimum Wage Database in www.wageindicator.cn, retrieved on 7th November, 2012

14. Source: Minimum Wage Database in www.wageindicator.cn, retrieved on 7th November, 2012

15. There is a separate minimum wage legislation in
India
Minimum Wages Act, 1948 is an Act to provide
for fixing minimum rates of wages in certain
employments and it extends to the whole India
More than one minimum wages exist in India
Minimum wages are declared at
national, regional, sector and occupational skill
level
Revision period of the fixed component of
minimum wages can be anywhere within 5 years
of its fixation
Source: Minimum Wage Database in www.wageindicator.org, retrieved on 7th November, 2012

16. Source: Minimum Wage Database in www.wageindicator.org, retrieved on 7th November, 2012

17. Source: Minimum Wage Database in www.wageindicator.org, retrieved on 7th November, 2012

18. There is more than one
Minimum wage is a The wage applies to
minimum wages
minimum standard that those who are single and
determined by law
is used by employers to have a 0-1 year work
(province and district
pay their workers legally experience
level)
The fixed component gets
Minimum wages are updated one in ten years
calculated on monthly based on inputs received
basis, and for daily from the National Wages
workers can be paid on Council and is then decided
daily or weekly basis by the President/ Manpower
Minister
Source: Minimum Wage Database in www.gajimu.com, retrieved on 7th November, 2012

19. Source: Minimum Wage Database in www.gajimu.com, retrieved on 7th November, 2012

20. Minimum wage in Pakistan is set by the
following two acts: 1. Pakistan Minimum
Wages for Unskilled Workers Ordinance, 1969
and 2. The Minimum Wages Ordinance 1961
There exists a national minimum wage as
announced by government for unskilled
workers. However, certain province (e.g.
Punjab) also fixes minimum wage rates that
differ between industries and skills
Up-ratings or adjustments of minimum wage
is decided upon review on changes in
economic conditions or cost of living
Source: Minimum Wage Database in www.paycheck.pk, retrieved on 8th November, 2012

21. The minimum wage is determined by the
Ministry of Employment & Labour (MOEL) based
on recommendations from the Minimum Wage
Council
The minimum hourly wage for 2012 is 4540 won
(about 4 USD)
The Minimum Wage Act was implemented in
1988 and has applied to all workers since
November 2000 except family businesses that
hire only family members, domestic workers
and seamen
Source: Lee Changgeun, Challenges for Minimum Wage Campaign in South Korea (2012)

22. Mechanisms that
determine the wages
of workers in the
private sector
Wages Council Act Collective bargaining
Market forces
1974 (CA)
Minimum wage
Wages in Malaysia are
Do not provide a decent largely determined by
standard of living and cover market forces
only a small number of workers
Source: Lee Heng Guie, Minimum Wage Policy - Curse or Cure, CIMB Economic Update (2012)

23. • Minimum wage in Malaysia has been set at
RM900/month for Peninsular Malaysia and
What it RM800/month for Sabah, Sarawak and Labuan
entails? • It will be initially implemented on 1st
January, 2013
Who will • About 3.2 million private sector workers
(25.8% of total employment) will be involved
benefit? in this policy
Which
groups or • All formal private sector employees except
those who are working in domestic services
sectors will sector such as domestic helper and gardener
be affected
Source: Lee Heng Guie, Minimum Wage Policy - Curse or Cure, CIMB Economic Update (2012)

24. • The minimum wage will take effect six months
from the date the Minimum Wage Order is
When will it gazetted
took effect? • SMEs are given the opportunity to apply to the
wage council for an extension before the
commencement date
How
regularly • The National Wages Consultative Council will
recommend the minimum wage to the
will it be government once every two years
reviewed?
Source: Lee Heng Guie, Minimum Wage Policy - Curse or Cure, CIMB Economic Update (2012)

25.  Perception is a process by which people
select, organize, interpret, retrieve and respond to
information from the world around them
(Schermerhorn, Hunt & Osborn, 2010)
 Perception is a process by which individuals organize and
interpret their sensory perceives in order to give meaning
to their environment. Perception can vary widely among
individuals exposed to the same reality (Rao, 2008)
Sources: Schermerhorn et al., Organizational Behavior 8th edition (2010)
Sree Rama Rao, Factors Influencing Perceptions (2008)

26. Perception
Source: Schermerhorn et al., Organizational Behavior 8th edition (2010)

27. Positive
(+ve)
Negative
Perceptions
(- ve)
Employers Employees Government
Interested parties

28. Possible positive perceptions and its
factors
Factors Perceptions
The perceiver (+) The implementation of minimum wage
- Interests (ensure satisfaction
policy in Malaysia is good because:
of their needs)
- Experience (current salary - Minimum wage will provide them
level) necessary social protection to enable
- Expectation (to have decent and
them overcome poverty (Lee, 2012;
fair wage)
Thiagarajah, 2000)
The situation - Minimum wage will increase their
- Increase in cost of living purchasing power (Thiagarajah, 2000)
The target - Minimum wage will increase pay rates
- Characteristics of minimum of low-paid employees (Verner, 2009;
wage (minimum wage serves as Nolan, O‟Neill & Williams,2001)
a standard for wage
- Minimum wage will increase morale
determination, mandated and
governed by law) and productivity (Nolan, O‟Neill &
Williams,2001)

29. Possible negative perceptions and its
factors
Factors Perceptions
The perceiver (-) The implementation of minimum
- Interests (ensure satisfaction
wage policy in Malaysia is bad because:
of their needs)
- Experience (current salary - Minimum wage will force employers to
level) cut certain fringe benefits to reduce
- Expectation (to have decent
costs (Wilson, 2012; Falk, Fehr &
and fair wage)
Zehnder, 2006)
The situation - Minimum wage will increase
- Increase in cost of living inflationary pressure (Wilson, 2012)
The target - Minimum wage will lead to
- Characteristics of minimum unemployment (Carpio, Nguyen &
wage (minimum wage serves Laing, 2012; Ni, Wang & Yao, 2011;
as a standard for wage
Wang & Gunderson, 2011)
determination, mandated and
governed by law)

30. Independent Variables
Factors influencing
Dependent Variable
perception
Employees
• Needs satisfaction perception towards
• Salary level minimum wage
• Future expectation • Positive
on fair wage • Negative
• High cost of living
• Characteristics of
minimum wage

31.  Is employee aware on the minimum wage policy gazetted in
Malaysia? – to achieve objective 1
 Does employee think that the implementation of minimum
wage policy is good (positive) or bad (negative)? –to achieve
objective 2
 What are the factors that lead to the positive or negative
perceptions? – to achieve objective 3

32. Research Design & Methodology
Research design
The population
The data
and sample
analysis
size
Data collection
Sampling
method and
technique
sources of data

33.  The research design that will be use in this research is
exploratory study
 This is because a study on employees perceptions
towards the implementation of minimum wage is very
limited and not much is known on the perceived
situation
 This type of research design is to explore the employees
perceptions towards implementation of minimum wage
in Malaysia

34.  The unit of analysis for this study is individual (the
individual here is referring to the employee working in
private sector)
 Time horizon for this study will be a cross-sectional study
whereby the data will be collected at one point in time.

35.  The population of this study is the employees who are
working in private sector in Shah Alam
 The sample size of this study is 30 employees from the
total population
 Refer to Roscoe (1975) sample sizes larger than 30 and
less than 500 are appropriate for most research

36.  Non-probability sampling will be used in this study
 Convenience sampling technique will be used which the
respondents are selected because they happen to be in the right
place at the right time.

37.  The data will be collected by conducting a structured
interviews with the respondents
 A list of predetermined questions will be prepared before
the interview is conducted
 All the answers given by the respondents will be taken
down or recorded for the purpose of analysis
 The same questions will be used throughout the
interview sessions with all the respondents and will be
asked in the same manner.

38.  Primary data
- Data will be collected through structured interview
 Secondary data
- Data will be collected from the journal articles,
reports, periodicals and web documents

39. The primary data collected from the interview
session with the respondents will be analyze
by using content analysis method
Content analysis is a research tool or
technique for the objective, systematic and
quantitative description of manifest content of
communications (Berelson, 1952)
It is used to determine the presence of certain
words, concepts, themes, phrases or sentences
within texts or sets of texts and to quantify this
presence in an objective manner