Malaysia and Vietnam share a rare regional trait: both set a monthly minimum wage as a single statutory figure per region, and both have just been through major adjustments in 2025–2026. But the two countries’ review “clocks” run differently: Malaysia legislates a minimum two-year review cycle, while Vietnam has no fixed cycle and adjusts to actual conditions. For investors, that difference determines how forecastable labour costs are.
Malaysia: one national rate, a legislated two-year review cycle
The framework is the National Wages Consultative Council Act 2011 (Act 732) and the Minimum Wages Orders issued by the Government on the Council’s recommendation. Unusually, section 25(1) of the Act obliges the Council to review the minimum wage at least once every two years — a review does not mean a hike, but it creates a legal “clock” companies can track.
The Minimum Wages Order 2024 raised the floor to RM1,700 per month (from RM1,500), effective 1 February 2025 for employers with five or more workers and all professional-sector employers (any size); firms with fewer than five workers got until 1 August 2025. The hike covered about 4.37 million workers. Non-compliance is an offence under the 2011 Act.
With the RM1,700 rate effective from 2025, the next review must happen by 2027 at the latest. The latest development (August 2026): the Malaysian Trades Union Congress (MTUC) proposed raising the floor to RM3,100 as a “living wage” benchmark, while SME associations urged deferment; the Human Resources Minister said the Council is reviewing but no decision had been made as of September 2026 — any change needs Cabinet approval. Notably, the Ministry of Human Resources (KESUMA) has repeatedly stressed the minimum wage should not be treated as an entry-level benchmark, especially for graduates and skilled workers — an important message for FDI firms hiring quality talent.
Vietnam: no fixed cycle, adjusted to the “actual rhythm”
In contrast, Vietnamese law legislates no review cycle. Article 92 of the Labour Code 2019 only tasks the National Wage Council with studying and recommending; the Government decides by decree when needed. The last three years illustrate the “actual rhythm” clearly: a 2024 hike, a complete freeze in 2025, then a catch-up 2026 round.
Decree 293/2025/ND-CP (issued 10 November 2025, effective 1 January 2026, replacing Decree 74/2024/ND-CP) fixes: Region I VND 5,310,000/month (VND 25,500/hour), Region II VND 4,730,000/month (VND 22,700/hour), Region III VND 4,140,000/month (VND 20,000/hour), Region IV VND 3,700,000/month (VND 17,800/hour) — up VND 250,000–350,000, averaging +7.2%.
The practical consequence: firms in Vietnam have no legal “countdown clock” like Malaysia’s; they must track the National Wage Council’s bargaining closely from Q3 each year plus macroeconomic signals (inflation, growth). 2025 was the textbook lesson: many firms had budgeted for a hike scenario, then had to replan when the State kept the floor flat.
Side by side: which “clock” is easier to forecast?
Forecastability: Malaysia wins on legal framework — companies know a review must come by 2027 at the latest and can follow the Council’s work. Vietnam wins on flexibility — the State can “freeze” in hard times (as in 2025) to share the burden with business, but long-term planning gets harder in return.
Application by size: Malaysia staggers the timeline by firm size (under-five-worker firms got a six-month grace period) and professional sector. Vietnam applies uniformly from the decree’s effective date to all sizes — no grace period for small firms. SMEs should note this when comparing compliance burdens.
Policy philosophy: both countries are shifting from “protective floor” to “productivity pay”: Malaysia runs a Progressive Wage Policy alongside the minimum wage — qualifying firms get up to RM200–300 per worker per month for raising pay tied to training; Vietnam’s floor hikes always carry the message of keeping pay-scale gaps aligned with productivity. For investors the signal is: do not just model the “floor”, model the accompanying incentives too.
Absolute levels: RM1,700 (Malaysia) versus VND 5.31 million in Region I (Vietnam) — Malaysia’s level is markedly higher, but the gap keeps narrowing through successive rounds. Latest pace: Malaysia +13.3% (1,500→1,700); Vietnam +7.2% on average (2026).
Practical recommendations
For Malaysia, put the “review by 2027 at the latest” milestone into medium-term budgets and watch MTUC proposals and the Government’s response — this review will set the tone for the next cycle. For Vietnam, set a Q3 annual tracking routine: the National Wage Council’s recommendation, CPI readings and policy signals. In both countries, do not use the minimum wage as the graduate entry benchmark — a message both KESUMA (Malaysia) and Vietnamese hiring practice agree on. Malaysian-law details should be confirmed by local counsel, especially as the 2027 review approaches.
Frequently asked questions
What is Malaysia’s current minimum wage and since when?
RM1,700 per month under the Minimum Wages Order 2024, effective 1 February 2025 for employers with five or more workers (and all professional-sector employers); firms with fewer than five workers from 1 August 2025.
On what cycle does Malaysia review the minimum wage?
Section 25(1) of the National Wages Consultative Council Act 2011 requires review at least every two years. With the current rate effective from 2025, the next review must happen by 2027 at the latest — but a review does not mean a hike.
What is the Malaysian unions’ RM3,100 proposal?
In August 2026, the MTUC proposed raising the minimum wage to RM3,100 as a “living wage” benchmark reflecting rising living costs. SME associations urged deferment; the Government (via the Human Resources Minister) said it is reviewing, with no decision — any change needs Cabinet approval.
Do small Vietnamese firms get a grace period for the new minimum wage?
No. Unlike Malaysia (under-five-worker firms got a six-month extension), Vietnam applies the new floor uniformly from the decree’s effective date, regardless of firm size.
Should the minimum wage be the starting salary for fresh graduates?
No, in both countries. Malaysia’s Ministry of Human Resources (KESUMA) states the minimum wage is not an entry-level benchmark — qualified, skilled people must be paid for their capability. Vietnamese hiring practice agrees: paying fresh graduates exactly the floor will not compete in the labour market.
For detailed advice on labour costs and compliance in Malaysia or Vietnam, companies may contact FLAT Law Firm.
This article has been quality-reviewed by the FLAW AI Legal Council