26July2021

Minimum Salary Serves as Cushion Against Ringgit Devaluation

20 March 2015 – The Philippine Embassy in Kuala Lumpur said today that Filipino household service workers (HSWs) in Malaysia have a legally-mandated minimum salary of US$400 a month, which should serve as cushion in light of the depreciation of the Malaysian ringgit.

"Philippine labor laws require a minimum monthly salary of US$400 in the employment contract of HSWs before they are allowed to depart the country. As their salaries are reflected in US dollars and in light of the depreciating ringgit, they should in fact be getting higher salaries. This is a contractual obligation that should be observed by employers and employment agencies," Ambassador J. Eduardo Malaya said.

At the exchange rate of RM3.5 to the US dollar, a Filipino HSW should receive RM1400 per month. Four months ago, before the devaluation, HSW should have had received RM1200 a month.

"This differential is, of course, not much in relation to the overall valuable service that is rendered by a Filipino HSW. All these should be taken into account," he added.

The Embassy also reminded employers to ensure that their Filipino HSWs or employees have sufficient health insurance, in light of increased health care fees in government hospitals and clinics charged against foreign nationals starting January 2015.

Provision for health insurance is also stipulated in the employment contracts.

The Embassy's Philippine Overseas Labor Office continually reviews the conduct of its accredited Malaysia employment agencies, and has implemented sanctions against those who violated the terms of their accreditation. END