Malaysiakini News

KPRU policy paper: Suggestion on employment insurance scheme

Ooi Heng, Elijah Khor & Yasmin  |  Published:  |  Modified:

COMMENT | Dewan Rakyat sitting will resume on 24 July 2017. The Human Resources Minister Richard Riot Jaem said the Employment Insurance Scheme (EIS) will be tabled in the coming Parliament sitting.

On 23 March 2016, Prime Minister Najib Abdul Razak said that the government agreed to implement the EIS for 6.5 million local workers in the private sector. The purpose of the EIS is to help working class people who lost their jobs to obtain financial aid and find a new job.

The workers will get a temporary financial aid and find a new job through employment service programmes which cover jobseekers’ aid, career counselling, and job matching. Besides that, workers who lose their jobs will be given training either in the form of retraining or skill enhancement in order to enhance their job ability.

Later, the Human Resources Ministry said that the implementation of the EIS is to help those who are unemployed due to involuntary loss of a job. Under this programme, they can receive a certain amount of unemployment allowance (based on their salary before unemployment) while it is compulsory for them to join a job seeking programme.

The EIS will be administered by the Social Security Organisation (Socso) which is an agency under the Human Resources Ministry.

According to the Human Resources Ministry, although this employment insurance is similar to the unemployment insurance in some other countries, an unemployment insurance focuses on unemployment benefits, while employment insurance is attached with an active labour market programme which helps the unemployed to find a job, while they are receiving unemployment benefits.

Therefore the EIS should not be seen as encouraging people to be lazy to work, but pressuring them to work.

According to the proposal of implementing EIS by the Human Resources Ministry, the participation is
compulsory for all employees who are Malaysian citizens and protected by the Socso. One must have contributed for a minimum of 12 months within 24 months in order to enjoy the benefits under EIS.

Those who voluntarily resigned, those whose employment contract has expired, and those who are mandatorily retired, are ineligible.

The think-tank Political Studies for Change (KPRU) wishes to emphasise in this article that the Social Security (Minimum Standards) Convention, 1952 (No 102) of the International Labour Organisation (ILO) stated that there should be monetary benefits given to the unemployed who are capable and available to

While the EIS proposal by the ministry limits the scope of unemployed to those who lost their jobs, KPRU is in the opinion that the concept of unemployed within the EIS should be extended to those who are jobless due to other factors. Such wider concept should be taken into account and given a clear definition so that workers will not face problems in enjoying the benefits under the EIS once this scheme is being in force.

Just as contributing to Socso and Employment Provident Fund (EPF) as usual, the employers and employees are required to contribute for the EIS. Each of both is required to contribute 0.25 percent of the employee’s salary.

While an unemployed is enjoying the benefits under EIS, he or she is required to participate in a job seeking service and career counselling. They must frequently report themselves on their efforts in job findings...

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