THE National Wages Consultative Council (Amendment) Act 2025 (“Act”) will come into effect on August 1, 2025. But what does this mean for employers?
Starting August 1, employers hiring apprentices will be legally required to pay them at least the national minimum wage, which is currently set at RM1,700 per month.
This marks a significant policy shift in how apprenticeship is viewed and it also reflects a broader commitment to improving wage standards in Malaysia.
Companies need to review apprenticeship contracts and prepare for compliance by August 2025 to ensure they meet the new legal requirements and avoid potential penalties.
Why is this happening?
Up until now, apprentices have not been legally recognised as employees under the Act, meaning they could be paid less or even nothing at all, despite working full-time and contributing to a business. That is about to change.
The Act expands the definition of “contract of service” to include apprenticeship and resulting from this, the provisions relating to the minimum wage will also be applicable to an apprentice.
A “contract of service” is currently defined as “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”.
Pursuant to the amendment, the definition of “contract of service” will now follow the definition in the Employment Act 1955 (“EA 1955”), Sabah Labour Ordinance and Sarawak Labour Ordinance, meaning:
“Any agreement, whether oral or in writing and whether express or implied, whereby one person agrees to employ another as an employee and that other agrees to serve his employer as an employee and includes an apprenticeship contract”.
What is an apprenticeship?
Under EA 1955, “apprenticeship contract” means:
A written contract entered into by a person with an employer who undertakes to employ the person and train or have him trained systematically for a trade for a specified period which shall be for a minimum period of six months and a maximum period of 24 months in the course of which the apprentice is bound to work in the employer’s service.
Apprenticeship is not internship
When tabling the National Wage Consultation Council (Amendment) Bill 2024 for the second reading last year, Deputy Human Resources Minister Datuk Seri Abdul Rahman Mohamad states that an apprenticeship programme is education and training governed by an apprenticeship agreement, allowing apprentices to gain the necessary competence to work in a job through structured training and financial remuneration or compensation.
It differs from a traineeship programme, which involves on-the-job learning that allows trainees to gain work experience and competencies to enhance their employability.
An internship programme involves students being exposed to real job environments and receiving short-term training to meet certain educational/learning qualifications.
He explained that, from a legal standpoint, only apprenticeship programmes are governed by specific laws and regulations. In contrast, other internal training programmes, such as traineeships or industrial training, are not bound by any formal legal framework.
Their implementation is left entirely to the discretion of the employer without oversight or mandatory guideline. ‒ July 3, 2025
Leonard Yeoh is a senior partner and Pua Jun Wen a senior associate with the law firm, Tay & Partners.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
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