The Malaysian Insight

THE economic slowdown coupled with the new minimum wage to take effect next year will see employers giving smaller bonuses for 2019 – or none at all.

Industry players said the downturn in some sectors this year will be reflected in bonus payouts, with those from small and medium enterprises (SMEs) pointing out that the government’s move to increase minimum wage and remove fuel subsidies will affect their finances, making them want to save up for the year ahead.

“Some sectors are experiencing a slowdown, and as a result, bonuses will be reduced. But I think they are still better off compared to civil servants, who are only getting RM500,” Malaysian Employers’ Federation executive director Shamsuddin Bardan told The Malaysian Insight.

He said year-end bonuses will likely be lower than usual, within the 1.4 or 1.5 months territory.

The exporting sector, however, saw improvements in 2019, and workers in the industry may see bigger payouts, he added.

Malaysia SME Association president Michael Kang is not optimistic, saying small and medium businesses are afraid to invest more into their operations due to unclear government policies, and employees will only get a month’s bonus.

“I think this year’s bonuses will be reduced. There are many new government policies that will be implemented next year, including the new fuel subsidy scheme and new minimum wage.

“Small and medium businesses will likely need to change their operational structure.”

He said consumers are buying less, even though they continue to throng shopping malls.

“Both businesses and consumers are worried that the economy may not be as good next year, and they’ve made adjustments to their spending to save money.”

The construction sector, meanwhile, is experiencing a downtrend, with higher costs and a lack of skilled labourers causing problems for developers and contractors, resulting in fewer development projects.

Steve Chong, a national council member and Johor chairman of the Real Estate and Housing Developers’ Association, said workers deserve a nice bonus after having worked hard all year.

“There could be adjustments to bonuses and benefits. Some companies might not even pay out bonuses. But the industry is seeing a downturn, and I hope workers understand.

“During the 1997 financial crisis, the country’s economy was terrible, but if a company’s finances allowed for it, bonuses were still paid out.”

Master Builders’ Association of Malaysia president Foo Chek Lee said many in the construction sector may see a decline in wages.

“Many companies’ finances are not looking good. Workers’ salaries might be reduced, what’s more, bonuses.”

Sabah SME Association president Foo Ngee Kee said the situation in the state is different from the peninsula.

In Sabah, he said, employees get ang pau for Chinese New Year.

“Our practice is to reward workers with ang pau. It does not matter if the company is making money. The ang pau is a token of appreciation.” – December 28, 2019.