NOTIFICATION ON THE IMPLEMENTATION OF PROGRESSIVE WAGE POLICY (DGP)
We are pleased to inform that the Government of Malaysia has introduced the Progressive Wage Policy (Dasar Gaji Progresif – DGP) as part of its labour market reform under the 13th Malaysia Plan (RMK13). This initiative aims to increase workers’ income in line with productivity growth and complement existing wage policies such as the Minimum Wage Order, Productivity-Linked Wage System (PLWS), and Collective Bargaining Instruments. Full implementation will commence in 2025 with an allocation of RM200 million, benefiting approximately 50,000 workers.
Participation in DGP is voluntary and incentive-based. Employers registered with SSM/PBT, PERKESO, and KWSP (excluding GLCs and MNCs) may apply, while eligible employees must be Malaysian citizens working full-time under a contract of service with a basic salary between RM1,700 and RM4,999.
Incentives for Employers:
- Up to RM200 per month per employee for entry-level workers (first 12 months).
- Up to RM300 per month per employee for non-entry-level workers (more than 12 months).
- Incentives apply for three years (2025–2027).
Additional Requirements:
- Employers must comply with the Progressive Wage Guide for starting salaries and annual increments.
- Training: Minimum 21 hours per year or via Recognition of Prior Learning (PPT).
Benefits:
- Enhances wage structure and talent market competitiveness.
- Improves employee satisfaction and productivity.
- Reduces financial burden on employers during the transition period.
For detailed guidelines and application procedures, please visit the official portal:
https://www.gajiprogresif.gov.my. Please note that the application is open until 31st December 2025.
We encourage all members to review the policy and consider participation to support national economic aspirations and workforce development.
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