‘Minimum wage policy will hit hotels hard’

Posted on September 11, 2012, Tuesday

Bidari Mohd Suhaili

KUCHING: Most hotels in Sarawak have applied to defer the implementation of the Minimum Wage Policy which will take effect on Jan 1, 2013, as they were concerned about their ability to sustain business in view of the increase in floor wage.

This was raised by Merdeka Palace Hotel and Suites human resource manager Dayang Rokaiyah at the `Public Seminar on National Minimum Wages Order 2012 and Minimum Retirement Age Bill 2012’ yesterday.

Rokaiyah said the adjustment would involve 70 per cent of staff in the hotel, and the biggest group was those in the rank-and-file levels.

“So, we have to take into account the consequential effects which will come into place.”

For instance, she said, it would affect those in the senior level as the wage difference would be minimal even though the job scopes were different.

“If we increase those earning RM500 to RM800 compared to seniors who are earning RM950, the difference is only RM150. We are worried it will de-motivate those in the senior level.”

Rokaiyah added that business owners would be hard hit, especially during low season in which even the Service
Point (SP) would not be able to cover.

“Business is normally low during the month of Ramadan, for instance, and we will need to top up to meet the minimum wage. But this will cost business owners.”

On average, she said an employee could get between one and four SPs a month with one SP equivalent to RM100
or more depending on individual hotel. With the SP fluctuating, she questioned whether the extra SP could be withheld and be paid later to allow business owners to cover the differences when business was not doing well.

“So, this is some of the specific issues that we want to look into. It is not that we do not want to implement, but the capability to sustain the business in compliance to the new law.”

Merdeka Palace has about 280 staffs at present, which does not include some 60 of those in the executive and management levels.

Rokaiyah said hoteliers needed more time to make the necessary adjustments as they did not want to retrench workers.

“We do not want to go to that direction where retrenchment becomes one of the options and add on to the unemployment rate.”

At the same time, they were also worried that employees would leave to look for better offer elsewhere during the deferment period.

“Then, we will be shorthanded, and this will affect service efficiency.”

Meanwhile, its executive assistant manager Bidari Mohd Suhaili pointed out that the hotel business structure in Sarawak differed from that of Sabah and Peninsular Malaysia.

“On average, you cannot get a room for RM100 in KL while in Sabah at least RM200. In Sarawak it’s between
RM190 to RM200. So, how can we sustain?

“We have to see the revenue versus the expenses. We cannot sell the rooms at a high price as there are intense competitions in the market with so many hotels mushrooming around the country.”

According to Rokaiyah, the hotel industry was the second contributor to the country’s revenue with some 193,000 employees in the industry alone.

Therefore, she foresaw a huge impact on the hotel industry when the Order takes effect next year.

While they had yet to come up with a win-win solution to the matter, Rokaiyah hoped the negotiations would address what could be defined in the minimum wage policy.

“It is going to be a huge challenge for hoteliers to overcome.”

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