The Employment Insurance System (Amendment) Bill 2022 passed by Dewan Rakyat
29 July 2022
The Dewan Rakyat (House of Representatives) of the Malaysian Parliament passed the Employment Insurance System (Amendment) Bill 2022 (‘the Bill’) on 25 July 2022 to amend the Employment Insurance System Act 2017 (‘the Principal Act’).
Under the Bill, the maximum limit of the insurable amount of wages of an employee is increased from RM 4,000.00 to RM 5,000.00 a month. This will have the effect of improving social security coverage for employees earning RM 5,000.00 per month and above, in the event of loss of employment in accordance with the Principal Act.
In conjunction with the above, the Bill also seeks to:
- introduce in the Second Schedule to the Principal Act, new contribution rates payable by the employer and employee when the monthly wages of an employee exceed RM4,000.00 and RM5,000.00 respectively; and
- introduce in the Third Schedule to the Principal Act, which sets out the rates of benefits (for job search allowance, early re-employment allowance, reduced income allowance and training allowance), new total contribution rates and corresponding assumed monthly wages when the wages of an employee exceed RM4,000.00 and RM5,000.00 respectively.
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The Bill still needs to be presented to the Dewan Negara (Senate) and if passed, to the Yang di- Pertuan Agong for Royal Assent before being gazetted and coming into force.
Article by Foo Siew Li (Partner) of the Employment Practice Group of Skrine