EIS bill re-tabled with contribution rates slashed


The government has proposed to reduce the contribution rates stipulated for private sector employers and employees via the revised Employment Insurance System Bill 2017 (EIS).

The revised bill was tabled in the Dewan Rakyat yesterday for first reading by Human Resources Minister Datuk Seri Richard Riot Jaem, after withdrawing the initial bill which was tabled on Aug 1 after receiving brickbats for the proposed high contribution rates.

The new bill has included a new contribution rates structure, which is half of the first schedule that was proposed in the previous bill.

The EIS bill will now have four contribution rate schedules, which would be up for revision once in three years, subject to the discretion of the minister. The system will begin with the first schedule next year.

Under the initial bill, employers and employees will contribute 10 sen each for those with monthly wages not more than RM30, and RM19.75 each for workers with monthly wages of more than RM4,000.

The contribution rates in the revised bill have been slashed by more than half to five sen each for those with monthly wages up to RM30, and RM7.90 each for employees with monthly salaries exceeding RM4,000.

Under the EIS bill, retrenched employees would be assured of “certain benefits” and re-employment placement programmes in the event of employment loss.

In a statement on Monday, Riot Jaem said the government remains committed to implement the EIS in January 2018, covering all private sector employers and employees — approximately 430,000 emplo- yers and 6.6 million workers.

“The scope of loss of employment includes retrenchment, voluntary/mutual separation scheme, force majeure, employers who abscond, bankruptcy, closure of company, business restructuring, redundancy, automation and other factors,” he said.

The system would be administered and operated by the Social Security Organisation (Socso) and governed by the Human Resources Ministry.

Among the benefits for retrenched workers under the proposed law are early re-employment allowance, training allowance and fee, job search allowance, as well as reduced income allowance.

Early re-employment allowance would be an incentive paid in a lump sum to an insured person for accepting an offer of employment from any employer, and commencing the employment within the waiting period or the period of receiving job search allowance.

Job search allowance would be a monthly payment for a period of three, to six consecutive months to assist an insured person who has lost employment during the period he is seeking for a new job.

Training allowance is a monthly payment to an insured person for a period not more than six months for attending any training programmes in Malaysia provided by a certified training provider. There is a minimum allowance rate of RM10 and a maximum rate of RM20 per day.

The law would apply to all industries having more employees. Among the parties exempted from the law include spouse of an employer, public servants from both federal and state government, and domestic servants including house servants, cooks and drivers.

The proposed law will also establish an Employment Insurance Committee, which would advise Socso on all matters related to the system and the investment to be made from fund raised from the employment insurance.

Employers are also prohibited from reducing the wages of any employee or discontinuing benefits payable to the employee due to his liability for any contributions payable under the proposed bill.

Socso will also be empowered to appoint agents to collect and receive payment of contributions on behalf of the organisation.