Latest news with #FederationofMalaysianManufacturing
Borneo Post
3 days ago
- Business
- Borneo Post
FMM calls for stamp act update to reflect modern employment practices
Tan Sri Dato' Soh Thian Lai KUCHING (June 7): The Federation of Malaysian Manufacturing (FMM) has urged the government to consider regularising and updating the First Schedule of the Stamp Act 1949 to reflect current economic and business realities. FMM president Tan Sri Dato' Soh Thian Lai said the federation recommends increasing the threshold for stamp duty exemption on employment contracts from the current RM300 to RM10,000, in line with modern salary benchmarks and industry norms. 'We call for a comprehensive review of the Stamp Act 1949, particularly in relation to the classification of employment contracts and appointment letters as instruments subject to stamp duty,' he said in a statement today. Soh further urged the Finance Minister to exercise his powers under Section 80 of the Stamp Act 1949 to make the necessary changes by way of subsidiary legislation, without the need to table amendments in Parliament. According to him, this approach will enable a timely and effective update to the law, ensuring that it remains practical, business-friendly and aligned with current employment practices. He expressed appreciation to the Finance Ministry and the Inland Revenue Board of Malaysia for their 'prudent and considerate decision' to exempt employment contracts executed before Jan 1 this year from stamp duty, and for remitting penalties on all late stamping for such contracts. This decision, he said, is a significant relief for employers, especially in the manufacturing sector, as it addresses the concerns raised by FMM in its engagements with the government. 'It recognises that the requirement to stamp employment contracts was not widely known or enforced in the past, and that penalising past non-compliance would have created an unnecessary burden on businesses,' he said. He said FMM also welcomed the further decision on the remission of penalties for any non-compliance involving contracts executed during the 2025 transition year, provided these are stamped before Dec 31 this year. Deferring the full implementation of the regulation to be effective only from Jan 1 next year is an excellent and pragmatic move, lauded Soh. He said it provides a much-needed adjustment period for employers while also paving the way for the Finance Minister to update the regulation under the Stamp Act 1949 without retroactive implications. employment Federation of Malaysian Manufacturing lead soh thian lai stamp
The Star
04-05-2025
- Business
- The Star
Minimum wage: 'Complex adjustments and challenges'
THE latest increase in minimum wage from RM1,500 to RM1,700 in February has landed employers in a complex landscape of adjustments and challenges. Among the issues facing them include increased payroll costs, wage compression, administrative and compliance burdens, and overall operational cost increases, especially in labour- intensive sectors. 'The recent minimum wage increase has inevitably contributed to higher operational costs for the Federation of Malaysian Manufacturing member companies, particularly those in labour-intensive sectors,' says FMM president Tan Sri Soh Thian Lai. 'Many manufacturers have had to absorb these additional wage costs while navigating an already challenging business landscape,' he says. Soh: Many manufacturers have had to absorb these additional wage costs while navigating an already challenging business landscape. Soh says it is also pertinent to highlight that manufacturers are contending with a broader set of cost pressures beyond wage adjustments. 'Companies are facing rising costs of raw materials, logistics and regulatory compliance, much of which is fuelled by persistent geopolitical tensions, including trade disruptions and global supply chain uncertainties. 'These external challenges have further intensified financial pressures on businesses, making it imperative for companies to pursue sustainable cost management strategies while safeguarding their competitiveness in both domestic and international markets.' Malaysian Industrial, Commercial and Service Employers Association president YK Lai agrees that wage hikes directly elevate payroll expenses, squeezing profit margins especially for small and medium enterprises (SME). 'Many are compelled to either absorb these costs or pass them on to consumers, potentially affecting competitiveness.' And while a pay hike is often associated with boosting morale among workers, it is a double- edged sword if it results in wage compression – where experienced employees earn similar wages to newcomers. 'This scenario may impact morale and retention,' says Lai. At the same time, Lai says smaller enterprises, often with limited specialised human resource services, face challenges in updating payroll systems and ensuring compliance with the new wage regulations. 'When it comes to cash flow, the immediate need to meet higher wage bills can be straining, especially for businesses with tight operating margins. Some may seek external financing to bridge the gap.' The increase in wages also means a series of new strategies devised by companies to cope with increasing costs. Diverse strategies Soh says in response, companies have adopted various strategies to mitigate rising expenses, including investments in automation and digitalisation to boost productivity, restructuring work processes, upskilling employees to enhance efficiency and optimising supply chain management. Subsequently, Soh says FMM continues to advocate for supportive policies to assist manufacturers in navigating these challenges. 'These include continued targeted incentives to encourage automation, grants to support workforce upskilling, and measures to stabilise input costs to ensure the resilience and growth of Malaysia's manufacturing sector.' Lai: For SMEs, employers are gearing towards operational efficiency, cost optimisation and technology adoption. —Others Lai says for SMEs, employers are gearing towards operational efficiency, cost optimisation and technology adoption. 'Businesses are streamlining operations, reducing waste and renegotiating supplier contracts to offset increased labour costs. 'And embracing automation and digital tools helps in reducing reliance on manual labour, thereby mitigating the impact of higher wages.' Other strategy include outsourcing HR functions by delegating HR and payroll tasks to specialised firms to allow SMEs to focus on core activities while ensuring compliance with wage laws. 'And of course, utilising government-backed financing options, such as micro-loans from Tekun Nasional and Bank Simpanan Nasional, can assist SMEs in managing increased operational costs.' For Soh, automation and digital transformation have become crucial strategies for Malaysian manufacturers to adapt to rising labour costs and broader operational challenges. 'By adopting smart technologies such as automation, system integration, robotics, IoT [Internet of Things], and data analytics, companies are significantly enhancing productivity, optimising resource use and reducing dependence on manual labour, helping to mitigate the impact of wage increases.' He says according to the FMM Business Conditions Survey 2H2024, 44% of member companies have adopted factory automation and Industry 4.0 initiatives. 'The main drivers for this shift are the pursuit of greater operational efficiency and productivity [cited by 60% of respondents] and the need to reduce operating costs [58%], clearly reflecting the industry's strategic focus on sustainable cost-saving and competitiveness-enhancing measures.' Soh also reveals that the survey finds system integration is the most widely adopted Industry 4.0 technology (63%), followed by Cloud Computing and Autonomous Robots (45% each), IoT (43%), and Big Data Analytics (34%). 'These trends highlight an accelerating shift toward digitalisation, automation and connectivity, with manufacturers prioritising smart technologies to future-proof their operations and build resilience.' To a question on the possible influence of the minimum wage hike over foreign investors' perceptions of Malaysia as a competitive manufacturing hub, Soh says Malaysia continues to be regarded as a preferred manufacturing hub in the region. 'It is important to note that cost increases are being experienced across all economies, as global wage pressures, supply chain shifts and geopolitical developments impact manufacturing competitiveness worldwide. 'In this context, maintaining and enhancing Malaysia's overall value proposition becomes even more critical.' He says beyond cost considerations, Malaysia offers a strong foundation that continues to attract foreign investors, such as a large and growing pool of skilled and semi-skilled workers, well-developed infrastructure, a reliable and increasingly sophisticated supply chain network, attractive investment incentives and a generally business-friendly environment. 'These factors collectively position Malaysia favourably compared to other regional manufacturing locations.' To maintain and strengthen Malaysia's attractiveness as a manufacturing and investment destination, Soh says efforts must be intensified in several key areas. 'These include continuously upskilling the workforce to meet the needs of high-value and high-tech industries; enhancing infrastructure, particularly in digital connectivity and logistics; strengthening supply chain resilience through greater localisation and diversification; ensuring the timely implementation of competitive incentive packages; and maintaining clear, consistent, and transparent regulatory policies that promote investor confidence. 'There is also a critical need to address excessive and unnecessary regulatory burdens that weigh down the competitiveness of our industries. Reducing compliance costs, simplifying approval processes and streamlining regulatory requirements will not only improve the ease of doing business but also send a strong signal to investors that Malaysia is committed to fostering a pro-business, pro-growth environment.'
Daily Express
03-05-2025
- Business
- Daily Express
Call for national action plan to tackle worker housing
Call for national action plan to tackle worker housing Kuala Lumpur: The Federation of Malaysian Manufacturing (FMM) has proposed that the government formulate a National Action Plan on Labour Quarters to address the shortage of proper accommodation for workers, especially in key industrial areas and logistics hubs across the country. Its president, Tan Sri Soh Thian Lai, proposed that the action plan be implemented jointly by the Ministry of Housing and Local Government, the Ministry of Human Resources and local authorities. Advertisement 'The current shortfall in Centralised Labour Quarters (CLQ) and Temporary Labour Quarters (TLQ) has impacted both worker welfare and employer compliance with Act 446, which governs minimum standards of housing and amenities,' he said in a statement. He added that employers often face delays in obtaining development approvals and navigating bureaucratic processes, making it difficult to provide workers with safe, regulated living conditions. As such, the FMM recommended three core measures under the proposed action plan, namely the fast-tracking of approvals for CLQ and TLQ development, targeted incentives for employers and developers to build or retrofit proper accommodation, and public-private partnership (PPP) models aligned with local development strategies. 'These measures are essential to ensure that worker housing evolves in tandem with Malaysia's industrial growth,' Soh said. Advertisement On other developments, FMM also praised the government's broader labour reforms, citing the recent drop in unemployment to 3.1 per cent and the increase in female labour force participation to 56.2 per cent as signs of effective policy intervention. Soh said the introduction of the Madani Workers' Card, which offers discounts on essential goods and services, is a significant step forward in integrating social protection into worker benefits. Advertisement Prime Minister Datuk Seri Anwar Ibrahim when delivering his message in conjunction with the 2025 National Labour Day celebration at Axiata Arena, Bukit Jalil here. Thursday, announced that one million union members will receive discounts of up to 30 per cent from over 100 companies offering essential goods and services through the Madani Workers' Card initiative. 'This is in appreciation of workers for their hard work in carrying out their duties and trust,' Anwar said. In a nod to Malaysia's labour movement history, Soh welcomed the revival of the 'Solidariti Perjuangan' song, penned by Human Resources Minister Steven Sim, which he said serves as a timely reminder of the central role of workers in nation-building.
Malay Mail
02-05-2025
- Business
- Malay Mail
Manufacturers call for national action plan to tackle worker housing woes
KUALA LUMPUR, May 2 — The Federation of Malaysian Manufacturing (FMM) has proposed that the government formulate a National Action Plan on Labour Quarters to address the shortage of proper accommodation for workers, especially in key industrial areas and logistics hubs across the country. Its president, Tan Sri Soh Thian Lai, proposed that the action plan be implemented jointly by the Housing and Local Government Ministry, the Human Resources Ministry and local authorities. 'The current shortfall in Centralised Labour Quarters (CLQ) and Temporary Labour Quarters (TLQ) has impacted both worker welfare and employer compliance with Act 446, which governs minimum standards of housing and amenities,' he said in a statement. He added that employers often face delays in obtaining development approvals and navigating bureaucratic processes, making it difficult to provide workers with safe, regulated living conditions. As such, the FMM recommended three core measures under the proposed action plan, namely the fast-tracking of approvals for CLQ and TLQ development, targeted incentives for employers and developers to build or retrofit proper accommodation, and public–private partnership (PPP) models aligned with local development strategies. 'These measures are essential to ensure that worker housing evolves in tandem with Malaysia's industrial growth,' Soh said. On other developments, FMM also praised the government's broader labour reforms, citing the recent drop in unemployment to 3.1 per cent and the increase in female labour force participation to 56.2 per cent as signs of effective policy intervention. Soh said the introduction of the Madani Workers' Card, which offers discounts on essential goods and services, is a significant step forward in integrating social protection into worker benefits. Prime Minister Datuk Seri Anwar Ibrahim when delivering his message in conjunction with the 2025 National Labour Day celebration at Axiata Arena, Bukit Jalil here yesterday, announced that one million union members will receive discounts of up to 30 per cent from over 100 companies offering essential goods and services through the Madani Workers' Card initiative. 'This is in appreciation of workers for their hard work in carrying out their duties and trust,' Anwar said. In a nod to Malaysia's labour movement history, Soh welcomed the revival of the 'Solidariti Perjuangan' song, penned by Human Resources Minister Steven Sim, which he said serves as a timely reminder of the central role of workers in nation-building. — Bernama
Malaysiakini
02-05-2025
- Business
- Malaysiakini
Manufacturers' group wants plan to address labour quarters shortage
The Federation of Malaysian Manufacturing (FMM) has proposed that the government formulate a National Action Plan on Labour Quarters to address the shortage of proper accommodation for workers, especially in key industrial areas and logistics hubs across the country. Its president, Soh Thian Lai, proposed that the action plan be implemented jointly by the Housing and Local Government Ministry, the Human Resources Ministry, and local authorities.
