{"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\/zh\/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"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>EMPLOYMENT LAW \u2013 MINIMUM WAGE \u2013 SERVICE CHARGE | Yew Huoi, How &amp; Associates | Leading Malaysia Law Firm<\/title>\n<meta name=\"description\" content=\"Can service charge be used to pay wages?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/yhalaw.com.my\/zh\/employment-law-minimum-wage-service-charge\/\" \/>\n<meta property=\"og:locale\" content=\"zh_TW\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"EMPLOYMENT LAW \u2013 MINIMUM WAGE \u2013 SERVICE CHARGE | Yew Huoi, How &amp; 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