What is the Employment Insurance System (EIS)?
Employment Insurance System, also known as EIS, was first introduced by the Perkeso (SOCSO) in January 2018. The main purpose of EIS is to support employees who have lost their jobs whilst they are looking for a new job, this is done in the form of contributions that are collected in a fund.
EIS also provides extended support around welfare, job search assistance and career counselling.
Who is eligible for EIS?
The Employment Insurance System Act 2017 stipulates that all Malaysian citizens, permanent residents and temporary residents aged 18 – 60 and who are active in the workforce are eligible for EIS. They must be working in the private sector and contribute towards their EIS on a monthly basis.
Is EIS compulsory for all employees?
All employees in Malaysia aged 18 – 60 years old are required to contribute, except for employees who are 57 or older and who have no previous contributions.
*Domestic servants, civil servants and self-employed are exempted.
What is the contribution rate for EIS?
The contribution rate is 0.2% of an employee’s salary for both the employers and employees, meaning a total contribution of 0.4% per month. Contribution rates are capped at an insured salary of RM 4,000 monthly.
When can employees apply for their EIS benefits?
When an employee loses their job due to one of the reasons below, they have 60 days to apply for EIS. In addition, they must meet the contributions qualifying conditions.
What categories of employment loss qualify for EIS?
The following categories make an employee eligible for EIS:
- Normal redundancy/retrenchment
- Voluntary/Mutual separation scheme (VSS/MSS)
- Constructive dismissal
- Closure of company due to natural disasters
- Resignation due to sexual harassment, threats or being ordered to perform dangerous activities on the job.
What categories of employment loss do not qualify for EIS?
The following categories make an employee eligible for EIS:
- Dismissal due to employee misconduct
- Voluntary resignation
- Retirement
- A fixed-term contract has come to an end
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Disclaimer: The information in this article is current as at 21-Oct-2022, and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related corporate bodies (Employment Hero). The views expressed in this article are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice. The Information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified, and no warranties are given that it is complete, accurate, up-to-date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article. You should undertake your own research and seek professional advice before making any decisions or relying on the information in this article.
