A revised Employment Insurance System Bill (EIS) has been tabled in Parliament aimed at providing a safety net for some 6.5 million workers in the event of loss of employment. The Bill was tabled by Human Resources Minister Datuk Seri Richard Riot (pic). He told the House that the Government hopes to pass the proposed law during the current Dewan Rakyat meeting which ends on November 30. The revised Bill maintains that monthly contributions to the scheme is to be split 50/50 between employers and employees. Monthly contributions are based on fixed rates ranging from the lowest at 10 sen for those earning RM30 a month to RM59.30 a month based for a maximum insured salary sum of RM4,000. Once passed, the EIS will see the creation of an insurance scheme for laid off employees who will be able to claim a portion of the insured salary for a period of between three and six months.


For example, under the job search allowance, an unemployed worker can get 80% of assumed monthly wages for the first month, 50% for the second month, 40% for the third and fourth months, and 30% for the fifth and sixth months. Retrenched workers will also be entitled to early re-employment allowance, reduced income allowance, and training allowance. The insurance scheme also covers staff involved in a voluntary or mandatory separation scheme, or those made redundant due to business restructuring or closure.

The new law also offers protection for those whose resignation is tantamount to constructive dismissal or due to threats to the insured or family including sexual harassment.


Employers are not allowed to reduce an employee’s salary indirectly or directly owing to contributions to the scheme. Failure by employers to comply with the scheme or employees making false claims could lead to a maximum RM10,000 fine or a jail term of up to two years, or both, on conviction. The EIS will be administered by the Social Security Organisation. It was reported that around 38,000 workers lost their jobs in 2015 and the number increased to more than 40,000 last year.


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