Amendments to two-tiered minimum wage based on place of employment in effect from 1 February 2022

25 February 2022

On 1 February 2022, the Minimum Wages (Amendment) Order 2022 (“Amendment Order”) came into force. The Amendment Order amends the Minimum Wages Order 2020 (“Principal Order”) which came into effect on 1 February 2020 and introduced a two-tiered minimum wage based on whether an employee’s place of employment is located within or outside the City Council or Municipal Council areas as set out in the Schedule to the Principal Order.

From 1 February 2022, the minimum wage rates will no longer depend on whether an employee’s place of employment is set out in the Schedule to the Principal Order but will rather depend on whether an employee’s place of employment is located in an area that has been declared or established as a City Council or Municipal Council area.

The key amendments to the Principal Order are as follows:

• Insertion of a definition for “City Council or Municipal Council areas” in paragraph 3 to mean “any areas declared or established as City Council or Municipal Council areas under the Local Government Act 1976 [Act 171], Local Government Ordinance 1961 [Sabah No. 11 of 1961] or Local Authorities Ordinance 1996 [Sarawak Cap. 20] or Putrajaya or Labuan”;
• Insertion of a definition for “place of employment” in paragraph 3 to mean “any place where work is carried on for an employer by an employee”. This mirrors the definition used in Employment Act 1955, the Sabah Labour Ordinance and the Sarawak Labour Ordinance; and
• Deletion of the Schedule to the Principal Order which listed 16 City Council areas and 40 Municipal Council areas. Accordingly, paragraphs 4, 5, 6, and 7 of the Principal Order are amended by deleting the words “as specified in the Schedule.”