Pursuant to the National Wages Consultative Council (Amendment) Act 2025 (“Amendment Act”), which is set to come into effect on 1 August 2025, apprentices will be legally recognised as employees under the National Wages Consultative Council Act 2011 (“Principal Act”), thereby extending them legal rights and protection of minimum wage afforded to employees under the Principal Act.
Prior to the amendment, apprentices were excluded from the scope of the definition of “contract of service” and, as such, were not entitled to the minimum wage protection accorded to the employees under the Principal Act.
In the absence of a legal obligation, many employers may opt not to pay apprentices, or to underpay them, since the administration of apprenticeship programme is left entirely to the employer’s discretion.
The Amendment Act now expands the definition of “contract of service” to include apprenticeship contract, aligning it with the Employment Act 1955, which applicable to Peninsular Malaysia, and the Labour Ordinances of Sabah and Sarawak. As a result, the minimum wage provisions under the Principal Act will be applicable to apprentices, granting them the same statutory entitlement and protection as other employees by extending minimum wage coverage to contract-based apprenticeship workers.
| Principal Act |
Contract of Service |
Amendment Act |
| Any agreement, whether oral or in writing, and whether express or implied, whereby one person agrees to employ another person as an employee and that other person agrees to serve his employer as an employee, but does not include an apprenticeship contract |
Has the same meaning assigned to it in section 2 of the Employment Act 1955, section 2 of the Sabah Labour Ordinance and section 2 of the Sarawak Labour Ordinance. |
The second phase of the
Minimum Wages Order 2024 which provides for a two-phase increase in the national minimum monthly wage from RM1,500 to RM1,700, will apply to all employers from 1 August 2025.
1 Consequently, employers are legally obligated to pay apprentices a minimum monthly wage of RM1,700, in line with the revised wage requirement.
With the upcoming enforcement of the Amendment Act, employers who currently do not pay, or pay apprentices less than RM1,700 per month, must take the necessary steps to comply with the law. Failure to do so may result in penalties for non-compliance under the Principal Act.
Commentary
This amendment and expansion of coverage marks a significant milestone in Malaysia’s employment law, reflecting an equitable recognition of labour rights. Apprentices are no longer treated as “free labour” or merely informal participants in the workforce. They are now accorded the same entitlement to minimum wages protection as any other workers. This shift not only affirms the value of apprentices’ contributions but also ensures that employers are held accountable in providing fair compensation and structured training.
Alert by Agnes Teh Ying Ying (Associate) of the Employment Law Practice of Skrine.
1 The first phase of the Minimum Wages Order 2024 was implemented on 1 February 2025.