Sime Darby Plantation Berhad : to Introduce New Minimum Wage Across Its Malaysia Operations

Sime Darby Plantation to Introduce New Minimum Wage Across Its Malaysia Operations

• RM1,500 new minimum wage to start on 1 May 2022
• More than 24,000 workers in Malaysia to benefit from new rates

Kuala Lumpur, 24 March 2022 - Sime Darby Plantation Berhad (SDP) today announced that it will implement the RM1,500 monthly minimum wage for all workers across its Malaysia operations on 1 May 2022. In addition to that, SDP is also implementing additional incentive programmes to encourage productivity among its workforce and attract more locals to join the industry.

SDP currently has more than 24,000 plantation workers in Malaysia. The roll-out of the new minimum wage will require the recalibration of hourly/daily rates and revision of previous benchmarks for wage calculations across the board. This will benefit all workers and employees across the board. Coupled with the enhanced productivity incentives, the more attractive take home pay will hopefully appeal to more locals in joining the workforce.

At the recent 15th National Seminar 2022 organised by the Incorporated Society of Planters (ISP), Plantation Industries and Commodities Minister, YB Datuk Zuraida Kamaruddin remarked that the plantation sector should not be facing any problem in implementing the new minimum wage. She added that the average salary level in the palm oil industry can be up to RM2,000 to RM2,500 per month.

Effective 1 March 2022, SDP had streamlined the minimum wage rate for all its Malaysia-based workers to RM1,200 a month regardless of their location. SDP's last wage rate adjustment was in May 2020, following a government decision to raise the minimum wage for workers in municipal council areas to RM1,200 a month and RM1,100 for those in non-municipal council areas. More than 16,000 workers in areas within or adjacent to a City or Municipal Council benefited from that adjustment.

"We decided to streamline the current minimum wage rates to RM1,200 a month across the Malaysia operations, as we work towards implementing the RM1,500 minimum wage rates," said Mohamad Helmy Othman Basha, SDP's Group Managing Director. "We also decided to enhance productivity incentives to ensure that SDP's workers are well compensated and rewarded for their productivity."

On top of their wages and productivity incentives, plantation workers at SDP operations enjoy several other free and subsidised benefits provided by the Company. These include free housing for themselves and their dependants, subsidised utilities, free medical treatment for employees and their immediate dependants, and various amenities such as school bus transport for employees' children, child-care centres and recreational facilities.

Since the pandemic, SDP has been actively recruiting Malaysians to take up the various job opportunities available in its operations. The company provides relevant training for all new employees and offers opportunities for career enhancement for those who are interested.

"We are integrating new technologies and innovations into our operations to increase productivity and upskill the workforce, we are reimagining plantations to transform many outdated practices that have been holding this industry back.

"In the very near future, we are looking forward to enticing local workers back into the palm oil industry, albeit one that is radically different; where workers are highly skilled and their capabilities well rewarded," added Mohamad Helmy.