KUCHING: Every employer and employee is expected to be contributing 0.2 per cent from the worker’s base salary to the Employment Insurance System (EIS) beginning next year.
The EIS – an insurance scheme for laid-off employees to claim a percentage of the insured salary for a period of between three and six months – was passed in Parliament in October this year.
The scheme would be administered by Social Security Organisation (Socso).
According to Human Resources Minister Datuk Seri Richard Riot, the EIS Bill is expected to be tabled in Dewan Negara next week and should it be approved, it would then be presented to the Yang di-Pertuan Agong for consent.
“Upon receiving Yang di-Pertuan Agong’s consent, the draft would become a law or an act of which it would then be presented as law on the Government Gazette and should be fully implemented beginning Jan 1, 2018,” he told reporters at a pre-Christmas celebration hosted by Socso Sarawak here yesterday.
Riot clarified that the EIS would serve as a social safety net aimed at helping workers who lost their livelihood due to loss of employment, ensuring that there would be ‘food on the table’ for the retrenched employees for at least six months.
He said the contribution accumulated next year would be used for retrenchment payouts and support services from 2019 onwards.
He also noted that the federal government had allocated RM122 million for retrenchment payouts next year.
“These payouts are known as interim benefits, which will be given to those retrenched in 2018,” he said.
Riot said for any retrenchment — beginning Jan 1, 2019 — Socso would provide retrenchment payouts, called ‘job search allowance’, with the amount depending on how long a retrenched worker has been contributing to the organisation.
According to the minister, the EIS has already been implemented in many countries such as Vietnam, Thailand, Taiwan, South Korea, China and Japan.
He said for most of the countries operating the EIS, they found that the scheme had significantly helped displaced workers during challenging economic situations.