Malaysia's Employment Insurance System Act amended

Eligible employees in Malaysia, who are earning RM5,000 and above, are now entitled to unemployment benefits such as immediate financial assistance.

Malaysia's Employment Insurance System Act 2022—which ensures unemployment benefits to eligible employees in the private sector—has been amended and approved in parliament, the Dewan Rakyat, on 25 July 2022 (Monday).

With the approved amendment, eligible employees in Malaysia, who are earning RM5,000 and above, will be entitled to protection coverage from the Social Security Organisation (SOCSO, or PERKESO). This includes, according to Conventus Law, temporary assistance for up to six months for employees who have lost their employment in terms of immediate financial assistance, and a re-employment placement programme.

Previously, the Act was limited to eligible employees who are earning RM4,000 and above, as seen in Second Schedule, Section 18, Point 45.

Per the latest amendment, Point 45 will officially be replaced with "when wages exceed RM4,000, but not RM4,100". It will be then followed by "when wages exceed RM4,100, but not RM4,200" until "when wages exceed RM5,000".

These groups can also benefit from the respective employer-employee contribution rates, with the highest employer contribution rate at RM9.90. Which, explained by Conventus Law, both employer and employee are each required to contribute 0.2% of an employee’s monthly salary to an insurance scheme which will be administered by SOCSO. The total contribution from both employer and employee would be 0.4% of an employee’s monthly salary.

On Facebook, Minister for Human Resources M. Saravanan said: "This increase can improve PERKESO security protection by increasing job-search allowance, early resumption allowance, rates of reduced income allowance, training allowance and training. The government hopes that the approval of this Act can give a targeted impact value which is to guarantee the social wellbeing of the recipients of existing and new benefits."

This Act is the second bill that was recently amended and passed in Parliament, after the approval of Employees' Social Security Act 2022 last week.

Image / Minister Saravanan's Facebook

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