Coverage of the Employment Insurance System Act 2017
General
The Employment Insurance System Act 2017 was introduced and came into force on 1 January 2018.
COVERAGE
All employers in the private sector are required to pay monthly contributions on behalf of each employee. (Government employees, domestic workers and the self-employed are exempt)
An employee is defined as a person who is employed for wages under a contract of service or apprenticeship with an employer. The contract of service or apprenticeship may be expressed or implied and may be oral or in writing.
All employees aged 18 to 60 are required to contribute. However, employees aged 57 and above who have no prior contributions before the age of 57 are exempt.
Contribution rates are capped at an assumed monthly salary of RM4000.00
Contribution Rates
Contributions to the Employment Insurance System (EIS) are set at 0.4% of the employee’s assumed monthly salary. 0.2% will be paid by the employer while 0.2% will be deducted from the employee’s monthly salary.
Contribution rates are set out in the Second Schedule and subject to the rules in Section 18 of the Employment Insurance System Act 2017. Employers in the private sector are required to pay monthly contributions on behalf of each employee. (Government employees, domestic workers and the self-employed are exempt)
Eligibility To Claim Benefits
All employees insured under the Act (known as Insured Persons) who have lost their employment are eligible with the following exceptions:
- Voluntary resignation by the Insured Person
- Expiry of the Insured Person’s fixed-term contract
- Unconditional termination of a contract of service based on an agreement between the Insured Person and his/her employer
- Completion of a project specified in a contract of service
- Retirement of the Insured Person
- Dismissal due to misconduct by the Insured Person
Applicants for benefits must prove that they are able to work, available to work and actively seeking work.
For more information, please visit:
The Employment Insurance Section (EIS) is managed by PERKESO and the contribution rate is governed by Section 18 and Schedule 2 of the Employment Insurance System Act 2017.
Currently, this rate is 0.2% for the employer and 0.2% for the employee based on the employee’s monthly salary.
Who needs to contribute?
All employers in the private sector whose employees are covered under the Act are required to pay contributions.
Exempted for Federal and State Government permanent employees, Domestic helpers, and self-employed.
Further information including a contribution table can be found on the PERKESO website at https://www.perkeso.gov.my/en/rate-of-contribution.html.
