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Kuala Lumpur

New legislation seeks to bar cuts to wages and fixed perks in Malaysia

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As reported in the Malay Mail Online, the novel bill for the Employment Insurance Scheme (EIS) was tabled for the first reading in the Dewan Rakyat by human resource minister Datuk Seri Richard Riot Jaem yesterday (1 Aug).

The EIS seeks to extend welfare coverage for the country’s 6.5 million private workers by compelling employers to contribute additional payment and bar them from making cuts to wages and fixed perks.

Clause 24 (1) of the bill states: “[The] employer shall not, solely by reason of his liability for any contributions payable under this Act, directly or indirectly, reduce the wages of any employee, or discontinue or reduce benefits payable to the employee under the conditions of service which are similar to the benefits conferred by this Act except as provided for in any other written law”.

According to the report, employers who violate the rule and are found guilty can be punished with a jail term of up to two years and fined a maximum RM10,000. The EIS is primarily aimed at helping provide financial assistance to private workers who lost their jobs until they find new employment.

ALSO READ: MEF objects to Employee Insurance Scheme for retrenched workers

Additionally, retrenched workers will be given help to search for new jobs, career counselling and training.

Prime minister Datuk Seri Najib Razak had previously announced on 1 May that the government has agreed to provide the Social Security Organisation with RM70 million for the payment of financial benefits relating to the EIS from next year.

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