The Employment Insurance System Bill 2017 Has Been Passed. Here's How It May Benefit You
The government hopes that this new bill will support workers should they lose their jobs due to economic downturns and recessions.
The Dewan Rakyat passed the Employment Insurance System Bill (EIS) 2017 after a six-hour debate on it yesterday, 25 October
The bill was debated from 7pm yesterday, 25 October, and passed just over midnight today, 26 October.
Malaysiakini reported that the bill was supported by BN MPs and opposition lawmakers from PKR, DAP, PAS, and PSM, while Bersatu and Warisan did not debate the bill.
The insurance scheme, which will be administered by the Social Security Organisation (SOCSO), seeks to provide temporary financial assistance for up to six months to workers who are retrenched
Under EIS, employees who are retrenched will be given a portion of the insured salary from the 0.4% monthly contribution. Employers must contribute 0.2%, while employees will contribute the remaining 0.2% under this new law.
All organisations and companies with one or more employees must comply to this new rule. Failing which, employers may be slapped with a fine not exceeding RM10,000 or imprisonment for a term no more than two years, or both, upon conviction.
Retrenched workers will also be entitled to job training for re-employment.
"This includes those who are between the ages of 40 and 50, and can be provided with appropriate training," explained Human Resources Minister Datuk Seri Richard Riot.
Contributions will start on 1 January 2018 and the payouts for retrenched workers will begin in 2019.
Datuk Seri Richard said that the government hopes that this new bill will support workers should they lose their jobs due to economic downturns and recessions.
"In 2015, more than 44,000 people lost their jobs, among others, due to automation measures in the financial sector, corporate restructuring, and falling crude oil prices in world markets. In 2016, more than 38,000 people lost their jobs, with the majority being in retail, manufacturing, and quarrying," he said, as reported by New Straits Times.
The contributions will be on a fixed rate based on the employees' salary.
Monthly contributions start from 10 sen for workers earning RM30 a month, while the maximum amount of contribution is capped at RM59.30 for those earning RM4,000 and above.
The Malaysian Insight reported Riot as saying that Malaysia can't afford to extend the insurance scheme from six months to one year as our contribution rate is far lower compared with Vietnam (3%), whose employment insurance scheme extends up to one year.
"If you ask me, I want the contribution to be increased too, but even now at 0.4%, there were still voices against it. So, we start small. We still have to start somewhere," he said. It was also reported that the scheme will benefit around 6.5 million workers should they lose their jobs.
Malaysia's EIS covers employees who lose their job from voluntary or mandatory retrenchment, or those whose jobs become redundant due to business restructuring, downsizing or closure.
The Star reported that it also covers employees who resign due to different kinds of harassment at their respective workplaces, including sexual harassment, or due to constructive dismissal.
What do you think about this new employment insurance system? Let us know in the comment section below.