By Malaysia is preparing to amend the National Wages Consultative Council Act 2011 (Act 732) to incorporate educational qualification levels, a step that would allow mandatory minimum starting salaries for graduates to be set in the future. Deputy Human Resources Minister Datuk Khairul Firdaus Akbar Khan told the Dewan Rakyat that once qualification levels are embedded in the Act, employers would no longer be able to arbitrarily disregard workers’ qualifications when determining their positions, according to TradersUnion citing The Edge Malaysia.
The statement came in response to a concern raised by Wan Razali Wan Nor that companies might lower job requirements from degree level to diploma or Sijil Pelajaran Malaysia level to avoid paying the higher salary. The RM2,500 minimum salary for graduates will take effect in June 2027, in line with Budget 2027. The National Wages Consultative Council is currently updating its starting salary guidelines, and tighter hiring regulations and industry training assessments are expected to align wage policy with current labour market needs.
What Act 732 currently does
Act 732 established the National Wages Consultative Council, the body that recommends minimum wage rates to the government. The council’s recommendations feed into the Minimum Wages Order, which sets the national wage floor that applies across sectors and regions. The current minimum wage in Malaysia is RM1,700 per month, effective from 1 February 2025 for employers with five or more workers, though smaller employers have different compliance timelines.
The proposed amendment would expand the council’s remit beyond a single national floor. By incorporating educational qualification levels into Act 732, the government creates a legal basis for setting separate wage floors tied to qualifications. That matters because the existing minimum wage framework does not distinguish between a worker with a degree and one without. A graduate minimum starting salary would sit above the general minimum wage and apply specifically to roles that require graduate-level qualifications.
How the anti-avoidance mechanism would work
The core problem the amendment targets is qualification downgrading. An employer that wants to pay less than the graduate floor could rewrite a job description to require only a diploma or SPM, then hire a degree holder into that lower-paid role. The minister’s statement indicates that once educational qualification levels are incorporated into Act 732, employers would not be able to easily or arbitrarily disregard workers’ qualifications when determining their positions.
For HR and payroll teams, this signals a future compliance obligation to map each role to the qualification level actually required for the work, not the level the employer chooses to advertise. The practical effect is that a graduate hired into a role that genuinely requires degree-level skills would need to be paid at least the graduate minimum, regardless of what the job advertisement says. The amendment does not yet specify how this mapping would be audited or which agency would enforce it, and those details have not been published.
What the RM2,500 floor means for employers
The RM2,500 figure takes effect in June 2027, giving employers roughly two years to adjust salary structures. For context, many private sector employers currently pay fresh graduates between RM2,200 and RM2,800 per month, though starting salaries vary widely by field, location and employer size. The floor will have the greatest impact on employers in lower-wage sectors and regions where graduate starting pay has historically been below RM2,500.
Payroll teams should expect to review salary bands for entry-level graduate roles well before the June 2027 deadline. The change also interacts with the Progressive Wage Policy, which operates separately and ties wage increases to productivity and skills certification. Employers participating in progressive wage programmes may need to reconcile those payments with the new graduate floor. The amendment does not yet state whether the RM2,500 applies to public and private sector employers alike, or whether exemptions will exist for micro and small enterprises, which have previously raised concerns about wage mandates.
What remains unclear
Several details have not been announced. It is not yet clear whether the graduate minimum applies to diploma holders, bachelor’s degree holders, or both, nor whether it covers fresh graduates only or also experienced workers moving into graduate-level roles. The amendment status is also unconfirmed: the minister’s statement indicates the government plans to amend Act 732, but it has not been stated whether the bill has been tabled, passed or gazetted. Employers should monitor the National Wages Consultative Council’s updated starting salary guidelines for further detail.
The interaction with the existing Minimum Wages Order also needs clarification. If the general minimum wage rises again before June 2027, the gap between the two floors could narrow. HR teams should track both the Minimum Wages Order and the Act 732 amendment process, since compliance will require evidence that each role’s qualification level justifies the salary paid.
Sources: tradersunion
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