What is the Employment Insurance System (EIS)?
The Employment Insurance System (EIS) is a financial scheme established under the Employment Insurance System Act 2017. Its primary purpose is to provide temporary financial assistance and job search support to employees who unexpectedly lose their jobs. Contributions are collected into a central fund, ensuring that support is available when needed, acting as a collective safety net for the Malaysian workforce.
Who Qualifies for EIS Contribution?
Generally, employees who qualify for EIS contributions are:
- Malaysian citizens (permanent or temporary residents)
- Aged between 18 and 60
- Employed under a Contract of Service (COS)
- Working in the private sector (full-time or part-time)
- Fulfilling the criteria for Loss of Employment (e.g., retrenchment, voluntary separation scheme, closure of company, etc.)
Certain categories of employment are exempted, such as government employees, domestic workers, and those working for their spouse or family business.
Understanding Your Contribution Rates
EIS contributions are a small percentage of your monthly salary, shared between you and your employer. The contributions are set at 0.4% of the employee's assumed monthly salary. This is divided as follows:
- Employer Contribution: 0.2% of your monthly wages.
- Employee Contribution: 0.2% of your monthly wages, deducted from your salary.
As of October 1, 2024, the maximum eligible monthly salary for calculation purposes is capped at RM6,000. This means that even if your salary exceeds RM6,000, your EIS contribution will be calculated based on this RM6,000 cap.
Comprehensive Benefits Offered by EIS
If you experience a Loss of Employment and meet the Contributions Qualifying Conditions (CQC)—which typically require a minimum of 12 months' contributions within a 24-month period for the first claim—EIS offers several crucial benefits:
- Job Search Allowance (JSA): This provides financial support for a period of 3 to 6 months. The payment rate gradually decreases over time, starting at 80% of your assumed monthly wage.
- Early Re-employment Allowance (ERA): If you accept a new job offer while you are still receiving JSA, you may be eligible for a financial incentive.
- Reduced Income Allowance: If you have multiple income sources and lose some, but not all, of them, you may be eligible for income replacement.
- Training Allowance: While undergoing approved training to enhance your skills, you may receive a daily allowance (typically RM10-RM20), depending on your assumed monthly wage.
- Training Fee: EIS covers course fees up to RM4,000, which are paid directly to the approved training provider. This encourages skill development and re-entry into the workforce.
- Re-Employment Placement Programme and Career Counselling: PERKESO, through MYFutureJobs, provides active assistance with job searching, including job matching tailored to your experience and skills, along with professional career counseling from Employment Services Officers.
How to Claim EIS Benefits: A Step-by-Step Guide
If you find yourself in a situation of job loss, here’s a general guide on how to claim your EIS benefits:
- Report the Loss of Employment: Inform your employer immediately. Your employer is legally required to report the incident to PERKESO.
- Register with MYFutureJobs: To be eligible for EIS benefits, you must register with MYFutureJobs for job search activities. This platform will be your primary tool for finding new employment.
- Submit Claim Documents: Once your Loss of Employment is confirmed, you or your employer must submit the required claim documents to PERKESO. This can often be done online through the ASSIST Portal or in person at the nearest PERKESO office.
- Comply with PERKESO Instructions: You must be willing to participate in the Re-employment Placement Programme and comply with any instructions issued by PERKESO, including attending interviews or training.
- Report New Employment: It is crucial to report to PERKESO upon receiving a job offer or resuming work on a permanent, contractual, temporary, or part-time basis, or apprenticeship.
Conclusion
The Employment Insurance System (EIS) is a vital safety net for Malaysian employees, offering not just financial relief but also crucial support for career transition during challenging times. By understanding your eligibility, contributions, and the comprehensive benefits available, you empower yourself with the knowledge to navigate unexpected job loss with greater confidence. EIS is a testament to Malaysia's commitment to safeguarding its workforce, ensuring that even in uncertainty, there is a pathway to re-employment and financial stability.