How the scheme works
The offer is straightforward. A small firm that gives a low-paid worker a rise, and puts that worker through some training, can claim RM200 a month back from the government for a year. For more senior staff it is RM300.
Two years on, 4,025 employers have taken it up. The government has paid out RM64 million and 51,363 workers have had a rise.
Nothing has gone wrong. The scheme aimed at 50,000 workers and reached slightly more than that. What is worth asking is how many people were eligible in the first place, and why so few employers wanted the money.
Who was eligible
The government’s own white paper, tabled in Parliament in 2023, put the eligible group at about four million Malaysians. They are citizens working full-time for small and medium firms, earning between RM1,500 and RM4,999 a month. That is not an outside estimate of the problem. It is the policy’s description of the people it was written for.
Against that, the target was 50,000. Budget 2025 put RM200 million behind it, later extended to RM300 million running to the end of 2027, and the expectation stayed at a little over 50,000 workers.
So the scheme was designed to reach one eligible worker in eighty. It has now done so. The problem is not that the scheme missed. The target was too small.
What it did for wages
Workers in the scheme did get a rise. The human resources ministry said in July that among professionals whose employers joined the scheme, median basic pay rose from RM2,900 to RM3,250. For technicians and associate professionals it went from RM2,350 to RM2,600. The 2024 pilot lifted entry-level pay from RM1,950 to RM2,200.
Set that against the median wage in the formal sector, which was RM2,864 last September. An extra RM250 a month is three thousand ringgit a year for somebody earning close to the middle of the Malaysian workforce. That is a real amount of money, and it is why the question here is about the scale of the scheme rather than whether it functions.
Why more employers did not apply
Six months after the launch, the Malaysian Employers Federation surveyed 236 companies and found five had applied. Its president said the reasons were limited awareness and a lack of interest in the incentives on offer.
The ministry has since named obstacles of its own. Employers struggle to meet the condition of a six per cent wage rise. Small firms fall short on the training requirement. Many do not know how to apply.
Then there is the shape of the bargain. The government’s payment lasts twelve months. The wage rise does not. The employers’ federation made this point in early 2024, before the pilot began, asking what would happen to participating firms once the subsidy ended.
The case for keeping it small
A voluntary scheme ought to start small. Testing a wage intervention on four million people at once would be reckless, and the obstacles the ministry lists are the kind that better outreach can fix. The claims window runs to December 2027, so the final count is not in.
It is also not the only thing the government has done about low pay. The minimum wage rose to RM1,700 in February last year, and unlike this scheme it reaches every worker in the country without an employer having to volunteer. Most workers who got a rise last year got it from the minimum wage, not from this scheme.
But the objection was on the record before the scheme started. ISIS Malaysia wrote in March 2024 that a voluntary policy would limit its own reach, pointing to Singapore, where employer take-up stayed low until the equivalent scheme was made compulsory.
Two years of evidence show the offer works. Pay a small employer a few hundred ringgit a month for a year, and the wages of the people who receive it move by amounts they will notice.
What the evidence does not settle is the harder question. Four million Malaysians qualify. Fifty thousand have been paid for. Until that gap narrows, the country has a working demonstration of a wage policy rather than a wage policy.
