The Employment Insurance System (EIS) was first implemented in January 2018 by PERKESO. It is a financial scheme aimed at helping employees who lost their jobs until they find new employment. The contributions are being collected in a fund in order to provide financial assistance to retrenched employees.

1. Employment
Insurance System
- S R
Ministry of Human Resources

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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

4. 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
assistance (7 days after job
loss confirmation) to job loss
contributors
Helping contributors who are
lost jobs get new jobs through
job relocation programs
including mobility assistance .
Increase the job absence of
job losses by vocational
training & training
programs

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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.
HOW THE EIS WORKS…

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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
TAKRIF LIPUTAN CONTRIBUTION
RATE
CLAIMS
EIS

9. 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

10. 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)

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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
Counseling
• Provide employment services and support
to the Insured to get appropriate
employment.
Employment Allowance
(EMP)
• Provide employment allowance for 1 - 6
months period subject to contribution
eligibility and willingness to resume
Early Repeat Allowance
(EBSA)
• Provide early retirement allowances as an
incentive to encourage the Insured to return
to work immediately.

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SIP BENEFITS CONT…
Reduced Income Allowance
(EPB)
• Provides a reduced income allowance for
the Insured who works with more than one
employer and has lost employment.
Training Allowance (EL)
• Provide daily training allowance if the
Insured undergoes training
Fi / Training Fee (FL)
• Fund the Insured Personnel training fee paid
directly to the registered training provider

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PRINCIPAL STATISTICS OF LABOUR FORCE, MALAYSIA 2017
67.7 68
80.2 80.1
54.3 54.7
0
10
20
30
40
50
60
70
80
90
2016 2017
TOTAL MALE FEMALE
YEARS 2016 2017
EMPLOYED 14.2mil 14.5mil
UNEMPLOYED 504.1 thousand 502.6 thousand
LABOUR FORCE PARTICIPATION RATE (%)

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SUMMARY

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https://www.perkeso.gov.my/sip/
https://asklegal.my/p/unemployment-benefit-
employment-insurance-system-allowance
http://www.freemalaysiatoday.com/category/nation/2
017/10/31/employment-insurance-system-not-
sustainable-at-current-deduction-rate/
RERENCES

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THANK YOU