Wage Increase Requirement in Government Contracts

Mr Zainal Sapari asked the Deputy Prime Minister and Minister for Finance whether all future Government contracts procuring outsourced services will include a clause requiring the service providers to adopt the annual NWC recommendation or indicate a provision for annual increment for low-wage workers in the outsourced contract.

Since July this year, MOF has advised all Government agencies to make clear to contracted firms that they should adhere to National Wage Council (NWC) recommendations on wage increments for the duration of the contract, and factor expected wage increments into their bid price when tendering for projects. For multi-year contracts, contractors may also present a year-by-year break-down of their bid price, to reflect wage increments over the contract duration.

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In the cleaning sector, where a Progressive Wage Model has been implemented, the Government supports the tripartite plan to factor in NWC recommendations when considering adjustments to the wage levels. This approach can also be applied to the security sector, where a tripartite committee has been formed recently to formulate a Progressive Wage Model for the sector. The Government will certainly continue to work with the tripartite partners to promote sustainable wage progression for low-wage workers.