His Majesty Sultan Haji Hassanal Bolkiah made a significant announcement on his 77th birthday, revealing Brunei’s new minimum wage policy set to encompass all private sector industries. This bold step, as noted by the Sultan, is geared towards enhancing the lives and well-being of the nation’s people, with a call for robust support from the business community.
The comprehensive minimum wage policy will roll out in two distinct phases, extending its coverage to both local and foreign workers, regardless of their employment status—whether full-time or part-time.
The inaugural phase targets the banking and finance sector, along with the information and communication technology (ICT) sector. Minimum wage rates for other industries will be disclosed at a later juncture, according to a statement released by the Labour Department.
What is this policy?
Under this policy, full-time employees in the banking, finance, and ICT sectors are entitled to a minimum monthly salary of $500, while part-time workers will receive a minimum wage of at least $2.62 per hour. Importantly, these minimum wage rates will apply prior to any deductions for retirement accounts like TAP, SCP, and SPK.
To facilitate this transition, employers will be granted a six-month grace period to update employment contracts as required. Employers must ensure that workers whose earnings fall below the established minimum wage have their contracts revised to reflect the new minimum wage rate, and subsequently, they must re-sign the updated terms.
The legal framework for this landmark initiative came into effect on July 12, 2023, through the Employment (Minimum Wage) Order 2023, which serves as an addendum to the Employment Order 2009. This set of regulations aims to establish a reasonable baseline salary that meets the subsistence needs of employees, shields them from excessively low wages, fosters motivation among local workers, and catalyzes socioeconomic development, as articulated by the Labour Department.
It’s important to note that non-compliance with the new directive carries stringent penalties. Employers who fail to adhere to the minimum wage regulations may face imprisonment for up to a year and fines reaching $3,000.
However, certain categories of employees are exempt from these minimum wage laws. This exemption includes government sector workers who traditionally enjoy higher salaries, apprentices, and foreign workers holding a Professional Visit Visa (PVV) or employed under a Special Authorization Work Pass (SAWP).