Employment Insurance System (EIS) / Sistem Insurans Pekerjaan (SIP) Malaysia

Employment Insurance System (EIS) will be implement on January 2018 in Malaysia and it is monitored by Social Security Organisation (SOSCO). You might be wondering what is EIS and what’s the impacts. Today, we’ll breakdown EIS accordingly in order to provide a clear picture to everyone.

What is EIS?

EIS is a scheme proposed by Malaysia Prime Minister, Datuk Seri Najib Razak, which aims to provide financial aid to the local retrenched employees. According to a report from Labour Department Malaysia, in 2016, there were 40,000 employees were retrenched from their jobs.

With the EIS enforced starting from January 1, 2018, employers are not allowed to reduce an employee’s salary either it is indirectly or directly owing to contributions made to the scheme. Any employers who failed to comply with the scheme could lead to a maximum RM10,000 fine or a jail term of up to two years or both upon conviction.

EIS is initiated not only provide financial aid to those retrenched employees but also helps them back to work within 6 months. Besides that, ONLY employees who meet the criteria (which we’ll be discussing later) are entitle to apply the EIS. There will be 430,000 employers and 6.6 million employees will be involved in EIS.

How EIS works?

A total of 0.4% will be contributed to the EIS and it is bear by Employer and employee equally, whereby employer will bear 0.2% and employee bear another 0.2%. The contribution of the EIS is shown in here.


Benefits of EIS

If you have further enquiry regarding on our Payroll System, you may send enquiry email to enquiry@mynetiquette.com or call us at 1700-81-8010 (Malaysia).



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