World · Malaysia Bureau
Contractors warn minimum wage hike risks raising operational costs
Malaysia's construction contractors have called for a phased implementation of higher minimum wages, citing concerns over project profitability. The industry body is urging policymakers to engage in formal consultations and establish price adjustment mechanisms for existing contracts.
LSN Malaysia ·
The Malaysian Building and Civil Engineering Contractors Association (MBAM) has cautioned that an increase in the statutory minimum wage could significantly strain operational expenses across the construction sector without proper safeguards.
In a formal position statement, MBAM has urged the government to implement any wage hike gradually rather than imposing it with immediate effect. The association emphasized that a phased approach would allow contractors time to adjust project budgeting and workforce planning accordingly.
MBAM has also stressed the importance of formal industry consultation before any policy changes take effect. The contractors' body argues that stakeholder input from construction firms, particularly small and medium-sized enterprises, is essential to understanding the sector's financial constraints.
Crucially, MBAM has proposed the establishment of a price adjustment mechanism for contracts already signed prior to any wage increase. Without such provisions, the association contends, contractors could face significant losses on existing projects where profit margins have already been calculated based on current wage rates.
The association's appeal underscores broader concerns within Malaysia's construction industry about balancing worker welfare with business sustainability in an already competitive market.