Malaysia will introduce a minimum wage for the first time in a move to bolster incomes amid rising living costs and speculation of a snap general election, a report said Tuesday.
An estimated 3.2 million workers are expected to gain from the move but labour unions, which have been battling for a minimum wage for the past 15 years, described the base rate as too little.
Private sector workers in peninsular Malaysia will receive a minimum salary of 900 ringgit ($297) a month while workers in the states of Sabah and Sarawak on Borneo island will get 800 ringgit.
"This is a special present from the federal government to all employees of our beloved country," Prime Minister Najib Razak was quoted as saying by the Star newspaper as he marked Labour Day.
Najib is trying to woo voters back to his ruling National Front coalition, which has governed Malaysia since independence in 1957, and speculation is rife that he could call polls as early as June. The due date is March 2013.
At the weekend police in Kuala Lumpur fired tear-gas at thousands of protesters calling for the elections to be free and fair and urging the government to clean up the electoral roll.
Malaysia, a trading nation, primarily in electronic parts, palm oil and oil, is South East Asia's third-largest economy and has set a goal to achieve rich nation status by 2020.
Awang Ibrahim, general-secretary of the Union of Beverage Industry Workers, said he was disappointed with the level of the minimum wage.
"The Malaysian Trades Union Congress asked for a 1,200 ringgit minimum wage 15 years ago and I believe the amount announced by the prime minister is insufficient for those living in cities," he said.
Najib did not set a fixed timeline for the implementation of the new policy. He said it could start from October and small businesses may be given a 12-month grace period to adjust to the new system.
The Socialist party criticised Najib for not setting a definite starting date.
"The most alarming feature of this announcement is that there is no actual time set to implement this minimum wage policy," S.Arutchelvan, secretary-general of the party said in a statement.
"With Najib's constant flip flopping, we would never see the daylight for this policy."