Malaysia plans to mandate minimum starting salaries for graduates under amendments to Act 732

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Highlights

Amendments to Act 732 will make minimum starting salaries based on educational qualifications mandatory, protecting graduates from employers arbitrarily lowering job requirements.
The National Wages Consultative Council is updating its starting salary guidelines, and the RM2,500 minimum salary for graduates will take effect in June 2027, in line with Budget 2027.
Tighter hiring regulations and industry training assessments will align wage policy with current labour market needs and technological advances.

This article was translated from the original. Read the original version by our correspondent here.

Act amendments and wage guidelines

As reported by The Edge Malaysia, Deputy Human Resources Minister Datuk Khairul Firdaus Akbar Khan said amendments to Act 732 would incorporate educational qualification levels so that minimum starting salaries for graduates could be made mandatory in the future.

He told the Dewan Rakyat that once this element is incorporated, employers would not be able to easily or arbitrarily disregard workers' qualifications when determining their positions. The statement was made in response to Wan Razali Wan Nor's concern that companies might lower job requirements from degree level to diploma or Sijil Pelajaran Malaysia level to avoid paying the prescribed starting salary for graduates.

In response to Syerleena Abdul Rashid's question about when the amendments would be tabled to mandate a starting salary of RM2,500, Khairul Firdaus said the National Wages Consultative Council was updating the basic starting salary guidelines based on the Malaysia Standard Classification of Occupations. The guidelines will be published alongside the implementation of the new Minimum Wages Order, which comes into force in June 2027 and includes a basic starting salary of RM2,500 per month for graduates and semi-skilled workers, as announced in Budget 2027.

Implications for the labour market and training

The proposed changes signal closer scrutiny of hiring practices, particularly for roles that require specific academic qualifications. If implemented, the move could provide clearer salary benchmarks for graduates while limiting the scope for downgrading job classifications purely to reduce labour costs.

On aligning training with job demand, Khairul Firdaus said the Department of Manpower assesses the effectiveness of training programmes across several areas, including how well training standards and content meet industry needs. The assessment also uses more than 2,000 National Occupational Skills Standards as a basis for curriculum development and takes into account industry involvement in delivering training.

In addition, the assessment covers the balance between theoretical and practical training, workplace training, upskilling in new technologies, and workers' ability to adapt to changing job functions and current technologies. This focus reflects the government's efforts to more closely link wage policy with workforce readiness in line with the needs of employment sectors.

In our previous coverage of quality investment criteria , we highlighted how the value of investment is increasingly measured by the quality of jobs created—including fair wages, safe workplaces and flexible working arrangements. We also discussed the importance of these benchmarks in particular for increasing women's participation in the workforce, as some women continue to leave the labour market due to a lack of childcare support.

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