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Employment Insurance Scheme(EIS)

What is EIS?

Employment Insurance Scheme (EIS) is a newly-created insurance scheme under the Employment Insurance System Act 2017. The insurance scheme is administered by Pertubuhan Keselamatan Sosial (PERKESO) and will provide immediate (seven days upon confirmation of loss of employment) financial relief for a period of up to six months to workers in the private sector who are retrenched.

The implementation of EIS began in January 2018 and is compulsory to all private sector organisations with employees between the ages of 18 – 60.  Claims for this scheme however can only be made from the year 2019 onwards.

Under the scheme, retrenched workers will be given a portion of the insured salary from the 0.4% monthly contribution which is equally contributed at 0.2% each by both employers and employees. The maximum eligible monthly salary contribution is capped at RM4,000; therefore if a contributor earns more than RM4,000 a month, the contribution is still fixed at 0.4% of RM4,000

 Those affected will also be entitled to a number of benefits covered under the scheme such as:

       i.        Job hunting assistance and counselling

   ii.    Early Re-employment allowance

  iii.    Reduced income allowance

  iv.    Training allowance and payment of training fees

The scheme is not applicable under the following circumstances:

  i. Voluntary resignation by an insured person

 ii. Expiry of service contract of an insured person

iii. Termination of service contract on mutual agreement between both employers and insured persons without terms and conditions

iv. Completion of work by service contract

 v. Retirement of an insured person

vi. The termination of the insured person’s service contract is due to misconduct.

All organisations and companies with one or more employees are compelled under this ruling. Failing which, employers may be penalised with a fine not exceeding RM10,000 or imprisonment for a term no more than two years, or both, upon conviction.

Therefore on top of the existing EPF and SOCSO contribution, EIS is another form of enforced contribution meant to safeguard the interest of workers nationwide.

Further information on the mechanism and the implementation of Employee Insurance Scheme (EIS) is available at Click here

Source of Article:

1. Perkeso. January 2018.Frequently Asked Questions Sistem Insurans Pekerjaan.Click here 

2. Perkeso. December 2017. Sistem Insurans Pekerjaan (SIP) Taklimat Awal Pelaksanaan SIP. Click here

Last modified on Monday, 13 August 2018 14:03