In an effort to alleviate the plight of low-income workers, Parliament has fixed and revised the minimum wage on a national basis vide the National Wages Council Consultative Act 2011 ("NWCCA 2011") and various Minimum Wages Orders ("MWOs") from 2012 to 2020. Under section 23 of the NWCCA 2011, an employer who fails to pay its employees the basic wages as specified in the MWOs commits an offence and shall, on conviction, be liable to a fine of not more than RM10,000 for each employee.
The case of Crystal Crown Hotel & Resort Sdn Bhd (Crystal Crown Hotel Petaling Jaya) v Kesatuan Kebangsaan Pekerja-pekerja Hotel, Bar & Restoran Semenanjung Malaysia [2021] 3 MLJ 466 (Federal Court) involved a hotelier who utilised the collection from service charges as part of the employees' basic wage to meet its statutory obligation to pay the minimum wage.
The Federal Court ruled that, as "basic wages" under section 23 of the NWCCA 2011 excludes any other kind of cash emolument payable to an employee for work done, including service charges. The hoteliers could not therefore utilise service charges imposed on customer bills to meet the statutory minimum wage of their employees. This decision impacts the hotel industry, particularly since this sector is one of the most significantly affected by the COVID-19 pandemic, in that hoteliers have to continue to pay the statutory minimum wage without being able to rely on income from service charges.
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