New Employment Insurance System Projected to Help over 50,000 Candidates in 2018

October 13, 201711:31 am808 views

As much as 57,282 local Malaysian who lost their jobs are projected to be eligible to apply for the interim Employment Insurance System (EIS) payment in 2018, with fund collection in the same year estimated at RM479 million.

Human Resources Minister, Richard Riot Jaem stated that the EIS is a government initiative aiming to help workers who lost their primary earnings due to loss of employments. Speaking on the programme announcement in March, Prime Minister Najib Razak said it would benefit around 6.5 million local employees in the private sector. According to the plan, this social safety net was expected to be tabled in Parliament on Oct 24.

Mr Riot said the stakeholders have agreed that the contribution rate of the “people centric” scheme would be reduced to 0.2 percent from previously 0.5 percent. Furthermore, the contribution would be contributed equally by both employers and employees, Free Malaysia Today reports.

“This is the lowest rate of contribution in the world. The Cabinet had endorsed the decision on Aug 17 and instructed the EIS Bill to be tabled in Parliament this October,” he said during a special briefing to the media regarding to the latest development of scheme.

See: Voluntary Standard for Flexible Working Arrangements Launched

Handled by the Social Security Organisation (Socso), Minister said that the main purpose of the EIS was to provide immediate financial assistance, enable the beneficiaries to cover their living expenses during the transition period after they lose a job until they obtain new suitable employment.

However, there is exception in EIS for workers who leave their employment voluntarily, work on fixed term contracts, retire or are dismissed due to misconduct. Employees belong to this types will not be eligible to claim the EIS benefits.

Created based on the “solidarity fund, pooling of resources and sharing of risks,” concept, Mr Riot said that the EIS would also provide job matching and job placement to help displaced workers get re-employed as well as providing required training and skills that will improve their employability.

“The government believes that the EIS will play a significant role as a stabiliser of the economy and give positive impact on maintaining economic activity in a sustainable manner, particularly during an economic slowdown or recession. The implementation of the EIS will also improve the efficiency of the labour market through the matching of labour supply and demand, thus increasing the productivity and competitiveness of the industry,” he said.

Additionally, he pointed out that the EIS has already been implemented in more than 75 countries including all developed countries as well as neighbouring countries such as Vietnam, Thailand, Taiwan, South Korea, China and Japan.

According to Mr Riot, most of the countries that adopted the scheme during a stable economic environment had proven that the programme significantly helped displaced workers during challenging economic situations. Because of this, he said that now is the perfect time to implement the EIS that will help Malaysian workers, who are assets to the nation.

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