Some 57,282 people who lost their jobs are projected to be eligible 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, said that the EIS, a social safety net aimed at helping workers who lost their earnings due to loss of employment, was expected to be tabled in Parliament on Oct 24.
Prime Minister Najib Razak had announced the scheme in March, which he said would benefit around 6.5 million local employees in the private sector.
Riot said that stakeholders have agreed that the contribution rate of the “people centric” scheme be reduced to 0.2% from 0.5%, which would be contributed equally by both employers and employees.
“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 in a special briefing to the media on the latest development concerning the EIS.
Riot said that the objective of the EIS, to be managed by the Social Security Organisation (Socso), was to provide immediate financial assistance, enabling the beneficiaries to cover their living expenses during the transition period until they obtain suitable employment.
However, under the EIS, workers who leave their employment voluntarily, work on fixed term contracts, retire or are dismissed due to misconduct, will not be eligible to claim the EIS benefits.
Riot said that the EIS, based on the “solidarity fund, pooling of resources and sharing of risks,” concept, would also provide job matching and job placement to help displaced workers get re-employed as well as reskilling and upskilling training to 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.
He pointed out that the EIS has already been implemented in more than 75 countries including all developed countries and neighbouring countries like Vietnam, Thailand, Taiwan, South Korea, China and Japan.
Riot stressed that most of the countries that introduced the EIS during a stable economic environment had proven that the scheme significantly helped displaced workers during challenging economic situations.
“Therefore this is the perfect time to implement the EIS, which is an important safety net for our workers, who are assets to the nation,” he said.