Overview of Employment Insurance Scheme (EIS)

Overview of Employment Insurance Scheme (EIS)

Introduction

  1. The Employment Insurance Scheme (EIS) is a financial scheme established by PERKESO in January 2018 to aid Malaysians who have been retrenched.
  2. EIS also provides Public Employment Services and Labor Market Information (LMI) to the retrenched individuals to help with their job search.
Coverage
  1. All private-sector employees who are Malaysian citizens or permanent residents aged 18-60 are required to contribute to EIS monthly. 
  2. Exception : Workers aged 57 and above who have never paid contributions before attaining 57 years of age.
  3. All private-sector employers are required to contribute to EIS monthly for each employee who is covered.

Benefits of EIS

1. Financial Assistance
  1. Job Search Allowance (JSA) : Allowance provision to those who have lost their one and only job for 3 - 6 months at the rates shown in Table 1. 
  2. Reduced Income Allowance (ISA) : allowance provision for those with multiple jobs and have lost at least one, but not all. 
  3. Training Fee (TF) : Financial assistance to cover vocational training for successful applicants. The payment will be made directly to the training provider. 
  4. Training Allowance (TA): Incentive paid to the training recipients to encourage them to attend all training sessions. 
  5. Early Re-Employment Allowance (ERA) : Incentive paid to JSA recipients who manage to return to work while still receiving their allowance. 
2. Job-search Assistance
  1. Re-Employment Placement program : One-on-one support by the SOCSO Employment Services Officer.
  2. Career Counselling : Counselling service by the SOCSO Employment Services Officers to identify any shortcoming of the insured individual in shaping their future career. 

Contribution Rate
  1. Employer : 0.2% of each employee's SOCSO wages.
  2. Employee : 0.2% of the employee's SOCSO wages.
  3. SOCSO wages is the total amount of employee's wages that contribute to SOCSO deduction.  
  4. The contribution rate for EIS is determined based on Schedule 2 of the Employment Insurance System Act 2017, which is capped at RM 4,000.00 SOCSO wages. 

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