{"id":3177,"date":"2021-07-12T13:40:08","date_gmt":"2021-07-12T05:40:08","guid":{"rendered":"https:\/\/yhalaw.com.my\/?p=3177"},"modified":"2024-09-09T09:11:39","modified_gmt":"2024-09-09T01:11:39","slug":"employment-law-minimum-wage-service-charge","status":"publish","type":"post","link":"https:\/\/yhalaw.com.my\/my\/employment-law-minimum-wage-service-charge\/","title":{"rendered":"EMPLOYMENT LAW \u2013 MINIMUM WAGE \u2013 SERVICE CHARGE"},"content":{"rendered":"<p><strong><em>Q: I am an employee in a hotel. In this industry, it is a standard practice for hotel employees to collect a 10% service charge from customers. The service charge is collected by hotel industry on behalf of us. However, recently the hotel industry implements a top up structure where they could utilize the service charge to top up any amount below the minimum wage.<br \/>\n<\/em><\/strong><strong><em>Do they have the right to do so?<br \/>\n<\/em><\/strong>No, the hotel industry is not entitled to utilize part or all of the employees\u2019 service charge to top up the minimum wage.<\/p>\n<p><strong><em>What legislation governs minimum wage in Malaysia?<br \/>\n<\/em><\/strong>The legislation governing minimum wage in Malaysia is the National Wages Council Consultative Act 2011 (\u201c<strong>NWCCA 2011<\/strong>\u201d) and Minimum Wages Order(s) 2012 to 2020 (\u201c<strong>MWO<\/strong>\u201d).<\/p>\n<p><strong><em>What is the objective of minimum wage policy?<\/em><\/strong><\/p>\n<ul>\n<li>The object of NWCCA 2011 and MWO are to serve as a social legislation with a view to protect workers against unfair wages and ensure they are not exploited.<\/li>\n<\/ul>\n<p><strong><em>Definition of minimum wages<\/em><\/strong><\/p>\n<ul>\n<li>Under NWCCA 2011, \u2018minimum wages\u2019 are defined as \u2018basic wages\u2019 determined by the government under the MWO.<\/li>\n<\/ul>\n<p><strong><em>Definition of basic wages<\/em><\/strong><\/p>\n<ul>\n<li>Under Employment Act 1955, \u2018wages\u2019 are defined as \u2018basic wages\u2019 and \u2018other cash payments payable to an employee for work done in respect of his contract of service\u2019.<\/li>\n<\/ul>\n<p><strong><em>Whether service charge can be utilized to top up the minimum wage?<\/em><\/strong><\/p>\n<ul>\n<li>Service charge falls within the definition of \u2018other cash payments\u2019, thus service charge cannot be a part of the basic wages.<\/li>\n<li>\u2018Service charge\u2019 is additional tips which does not belong to the hotel industry but the eligible employees. The hotel industry merely collects and holds the monies as a fiduciary or trustee until distribution to the eligible employees. In other words, the ownership of the service charge vests in the eligible employees.<\/li>\n<li>As such, the hotel industry cannot utilise money it does not own. The hotel industry is not entitled in law to appropriate and utilise the service charge to meet its statutory obligation.<\/li>\n<\/ul>\n<p><strong><em>The hotel industry explains that it is because COVID-19 pandemic affects the hotel industry severely.<br \/>\n<\/em><\/strong>The Covid-19 pandemic which affects the hotel industry as a whole cannot be a reason for the Courts to depart from the accepted principles of law in respect of the construction that \u2018service charge\u2019 is not a part of \u2018basic wages\u2019 under the minimum wage legislation.<\/p>\n<p>Case in point: <em>Crystal Crown Hotel &amp; Resort Sdn Bhd (Crystal Crown Hotel Petaling Jaya) v Kesatuan Kebangsaan Pekerja-Pekerja Hotel, Bar &amp; Restoran Semenanjung Malaysia [2021] 3 MLJ 466. Federal Court (Putrajaya) \u2013 Civil Appeal no: 02(f)-4-01 of 2018<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Can service charge be used to pay wages?<\/p>","protected":false},"author":9,"featured_media":3191,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1573],"tags":[2210,2209,2208],"class_list":["post-3177","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment","tag-hotel-industry","tag-minimum-wages","tag-service-charges"],"_links":{"self":[{"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/posts\/3177"}],"collection":[{"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/comments?post=3177"}],"version-history":[{"count":2,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/posts\/3177\/revisions"}],"predecessor-version":[{"id":3192,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/posts\/3177\/revisions\/3192"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/media\/3191"}],"wp:attachment":[{"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/media?parent=3177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/categories?post=3177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/tags?post=3177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}