Ministry of Human Resources

Employment
Insurance System

-SR
 HOW THE EIS STARTS…
 Thursday, 26 Oct 2017 ,KUALA LUMPUR :
 The Employment Insurance System (EIS) Bill was passed in the Dewan Rakyat
 Laid off employees to claim a portion of the insured salary for a period of
between three and six months

 Retrenched workers will also be entitled to early re-employment allowance,

reduced income allowance, and training allowance

 Administered by Socso
 MPs had voiced their support for the Bill :
• Shamsul Iskandar Mohd Akin (PKR - Bukit Katil)
• Charles Santiago (DAP - Klang)
• Datuk Hasbullah Osman (BN - Gerik)
• Human Resources Minister - Datuk Seri Richard Riot
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 PARLIAMENT PASSES THE EIS BILL

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 WHAT IS EIS?
A social security network aimed at helping workers who lost their jobs for financial
assistance and seeking new jobs.

Provide immediate financial Helping contributors who are Increase the job absence

assistance (7 days after job lost jobs get new of job losses by vocational
loss confirmation) to job loss jobs through job relocation training & training
contributors programs including mobility programs 
assistance . 
 HOW THE EIS WORKS…
Deducting a certain amount from your monthly salary

 Percentage that would be deducted for contributing to the EIS fund would be 0.2% of your
salary.

 A look at the bill on page 57 where a full schedule of the rates of contributions for different
salaries, it starts from as low as RM30 and goes up to RM4,000. Any wages above RM4,000
would contribute at the same amount

 Employees’s Social Security Act 1969 (sections 14 and 15 of the EIS):

All employers would have to register their industry accordingly and those who
have already registered would been deemed to be registered

Any failure to carry out the registration process in sections 14-16 can result in you being
slapped with a RM10,000 fine and/or jail time for up to 2 years.

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 An example of how the rates of
contribution work. Screenshotted
from the EIS bill. 

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 Section 16 also tells us that employees would also have to be registered
by their employers accordingly:

“All employees in the industries to which this Act applies shall be registered
and insured by the employers—
(a) in the case of employees who are employed on or before the date the
industries are registered under section 14, on the date the industries of the
employers are so registered; and
(b) in the case of employees who are employed after the date the industries
are registered under section 14 or 15,
within thirty days from the date the employees enter into employment, in
such manner as prescribed irrespective of the amount of wages.”

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 Overview

EIS

TAKRIF LIPUTAN CONTRIBUTION CLAIMS

RATE

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 TAKRIF LIPUTAN
All private sector employers need to pay monthly contributions
for each employee. (Exempt from civil servants, domestic
servants and self-employed).

Employee is a person employed by an employer under a service

contract or apprenticeship. The service contract or apprentice is
either written or oral, express or implied.

All employees aged 18 years to 60 years old must be nominated

except for employees aged 57 years and above and no
contribution has been paid before reaching 57 years.

Defined contribution coverage is subject to the insured ceiling

ceiling (GYD) of RM4000.00
CONTRIBUTION RATE

The contribution rate for the

Occupational Insurance System (SIP) is
from 0.2% of employer shares and
0.2% of the employee's share of the
employee's monthly salary.

The contribution rate is subject to the 

Second Schedule of Section 18 of the
Insurance System of Employment Act
2017. All private sector employers
have to pay monthly contributions for
each employee. (Exempt from civil
servants, domestic servants and self-
employed)
 EXAMPLE :
CONTRIBUTION RATE AND TOTAL JOB SEARCH ALLOWANCE(S)
+ TRAINING ALLOWANCE FOR EMPLOYEES EARNING RM1000
AND RM2000 PER MONTH

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 EXAMPLE :
CONTRIBUTION RATE AND TOTAL JOB SEARCH ALLOWANCE(S)
+ TRAINING ALLOWANCE FOR EMPLOYEES EARNING RM3000
AND RM4000 PER MONTH

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 OTHER COUNTRY
CONTRIBUTION RATE…

Thailand 1.25%
Vietnam 3%
Saudi Arabia 2%
South Korea 2.15%.

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 SIP BENEFITS

Job Placement & Career Employment Allowance Early Repeat Allowance

Counseling (EMP) (EBSA)

• Provide employment services and support • Provide employment allowance for 1 - 6 • Provide early retirement allowances as an

to the Insured to get appropriate months period subject to contribution incentive to encourage the Insured to return

employment. eligibility and willingness to resume to work immediately.

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 SIP BENEFITS CONT…

Reduced Income Allowance

Training Allowance (EL) Fi / Training Fee (FL)
(EPB)

• Provides a reduced income allowance for • Provide daily training allowance if the • Fund the Insured Personnel training fee paid

the Insured who works with more than one Insured undergoes training directly to the registered training provider

employer and has lost employment.

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 PRINCIPAL STATISTICS OF LABOUR FORCE, MALAYSIA
2017
YEARS 2016 2017

EMPLOYED 14.2mil 14.5mil

UNEMPLOYED 504.1 thousand 502.6 thousand

LABOUR FORCE PARTICIPATION RATE (%)

90
80.2 80.1
80

70 67.7 68

60 54.7
54.3
50

40

30

20

10

0
2016 2017

TOTAL MALE FEMALE

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 SUMMARY

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 RERENCES
https://www.perkeso.gov.my/sip/

https://asklegal.my/p/unemployment-benefit-employ
ment-insurance-system-allowance

http://www.freemalaysiatoday.com/category/nation/
2017/10/31/employment-insurance-system-not-sus
tainable-at-current-deduction-rate/

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 THANK YOU
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