Minimum wage and the hospitality industry in Malaysia: An analysis of employee perceptions

Malaysia introduced a minimum wage law in 2012 which became operative in the hospitality industry on October 1, 2013. This article examines the perceptions of hospitality employees toward the minimum wage policy. The findings suggest that most employees do not believe that the minimum wage will significantly improve the salary levels in the hospitality industry. Indeed, there are government guidelines that allow hospitality operators to restructure pay components to meet the minimum wage rate. In particular, all or part of the service charge may now be converted to form part of basic salaries. Consequently, increase in basic salaries may not necessarily lead to increase in total salaries. Employees also believe that hospitality operators may reduce or eliminate fringe benefits and, therefore, negate the benefit of minimum wage.