Govt to look into need to extend progressive wage policy incentive, says Rafizi

The Star

The government will consider extending the incentive for employers under the Progressive Wage Policy (PWP) from 12 months to 24 months to allow employers to benefit from higher productivity and skilled workers, said Economy Minister Rafizi Ramli.   Speaking to reporters after a public dialogue session on PWP on Tuesday (Aug 6), Rafizi stated that the extension of the incentive is expected to be implemented in October.   He also emphasised that employers should not view the PWP as an additional cost, but rather as a measure aimed at accelerating skill improvement among workers in small and medium enterprises.   WATCH MORE: https://thestartv.com/c/news  SUBSCRIBE: https://cutt.ly/TheStar  LIKE: https://fb.com/TheStarOnline

Transcript

00:00Dr. Norris, do you want to join?

00:30It's a good system to implement this to avoid abuse.

00:35So our focus for the next 6 months, and PKSO has been working on this for a year,

00:43is for us to test this system first.

00:45If we test it for 12 months, it won't last.

00:50It means that it enters the system, then it receives incentives,

00:57and after the incentives, it is reimbursed.

01:00So what we want to do is that based on the first 1,000 companies that go through this process,

01:11then we have data and we will be able to determine what is the most optimum tempo

01:19for when we implement it in full.

01:22Is it 24 months? Is it 15 months? Is it 20 months?

01:26We don't want to offer too much because then I think the cost to government is higher.

01:34So I think that's why we are going through this process.

01:37But I made it clear at the town hall that we are aware that we need to cross a certain number of months

01:47before employers will stick to the higher salary bands.

01:53And if we scale this, how much will be allocated in the next phases.

02:05Let us go through Project Rintis.

02:08Because we don't want to rush this and involve millions of people.

02:15I mean, at full scale.

02:17It means that it involves millions of workers, employers.

02:21So when we planned last year, the most important thing is let us get the pilot project off the ground first

02:33because we need to go through that learning curve.

02:36Once we get the learning curve, the system is already there,

02:39we already know the behaviour of the employers, the behaviour of the workers.

02:45It means that the time needed to scale to a much wider group will take much lesser time

02:54compared to, for example, we don't do the pilot test, we want to do it at full scale.

02:59So I think the decision is not long.

03:03But we have to go through this process and then we have to look at the numbers and the experience

03:09that will allow us to decide on the scaling up.

03:14Our target is to get 1,000 employers out of the 5 industries that have been identified.

03:26We have also launched a progressive salary guidance book.

03:35That's why the employers sometimes frown when they look at us.

03:39Because the gap is big.

03:41Some pay RM2,600 now, but when they look at the guidance book, they have to pay RM3,300, RM3,200 and so on.

03:52That's why we want to see how many companies that want to come on board.

03:58The registration number is 1,108.

04:04Those who have registered in the system.

04:08When they register, they create an account.

04:10Then to be part of the progressive salary guidance book, they have to submit their list of employees.

04:19Because the next day, they will check one by one.

04:22Is he a worthy employer? Is he a good employee?

04:25Did he raise his salary last time?

04:27Of the 1,108 that have applied, 446 have submitted their application.

04:38So we have about 2-3 months left.

04:41God willing, we will continue the process of management and promotion to the employers.

04:52So that we can reach the target of 1,000 employers in this RINTES project.

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