The Employees’ Social Security Act 1969 (SOCSO Act) and the Employment Insurance System Act 2017 (EIS Act) have undergone significant amendments to raise the salary ceiling used for employee contributions and benefits.
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Amendments in 2022
In 2022, the salary cap was increased from RM4,000 to RM5,000.
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Amendments in 2024
Effective October 1, 2024, the salary ceiling was raised further to RM6,000 per month under the Employee’s Social Security (Amendment) Act 2024 and the Employment Insurance System (Amendment) Act 2024. This increase broadens the range of workers covered under the SOCSO and EIS schemes, ensuring enhanced social security protection, particularly in cases of workplace injuries, illnesses, or job loss.
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Contribution Rates
The updated mandatory employer contributions are as follows:
1. SOCSO: Between RM1.70 and RM17.50 per employee, per month; and
2. EIS: Between RM0.20 and RM2.00 per employee, per month.
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Impact on Employers
While the increase per employee may seem minor, it still imposes new financial and compliance responsibilities on employers. Employers must update their payroll systems accordingly to reflect these changes. Non-compliance with these requirements can lead to severe penalties, including imprisonment of up to two years, fines up to RM10,000, or both, as stipulated in Section 94 of the EIS Act and Section 16 of the SOCSO Act.
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Conclusion
These amendments aim to provide greater social protection by increasing the range of employees eligible for benefits. Employers must proactively adjust their systems and ensure compliance to avoid legal repercussions while enhancing workforce welfare.
This article is intended to be informative and not intended to be nor should be relied upon as a substitute for legal or any other professional advice.
The Salary Ceiling for Contributions Has Now Increased to RM6,000
The Employees’ Social Security Act 1969 (SOCSO Act) and the Employment Insurance System Act 2017 (EIS Act) have undergone significant amendments to raise the salary ceiling used for employee contributions and benefits.
.
Amendments in 2022
In 2022, the salary cap was increased from RM4,000 to RM5,000.
.
Amendments in 2024
Effective October 1, 2024, the salary ceiling was raised further to RM6,000 per month under the Employee’s Social Security (Amendment) Act 2024 and the Employment Insurance System (Amendment) Act 2024. This increase broadens the range of workers covered under the SOCSO and EIS schemes, ensuring enhanced social security protection, particularly in cases of workplace injuries, illnesses, or job loss.
.
Contribution Rates
The updated mandatory employer contributions are as follows:
.
Impact on Employers
While the increase per employee may seem minor, it still imposes new financial and compliance responsibilities on employers. Employers must update their payroll systems accordingly to reflect these changes. Non-compliance with these requirements can lead to severe penalties, including imprisonment of up to two years, fines up to RM10,000, or both, as stipulated in Section 94 of the EIS Act and Section 16 of the SOCSO Act.
.
Conclusion
These amendments aim to provide greater social protection by increasing the range of employees eligible for benefits. Employers must proactively adjust their systems and ensure compliance to avoid legal repercussions while enhancing workforce welfare.
This article is intended to be informative and not intended to be nor should be relied upon as a substitute for legal or any other professional advice.
About the Author
Damia Amani binti Shaiful Bahri
Associate
Dispute Resolution
Harold & Lam Partnership
[email protected]
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