Employers, employees and govt should chip in with RM1 for EIS scheme: MEF

PETALING JAYA: Malaysian Employers Federation (MEF) has suggested that every employee contributes RM1 a month to the Employment Insurance System (EIS) fund, and that employers and the government match employees' contribution ringgit for ringgit.
Pointing out that Malaysia has 6.8 million employees in the private sector, MEF executive director Datuk Shamsuddin Bardan said if each of the three parties contributes RM1 a month to the EIS fund for every employee, it would work out to RM245 million a year.
"As many as 90% of retrenched workers in the country have received compensation, and the sum that should be given to the 10% of laid-off employees who were not compensated amounts to only RM65 million," Shamsuddin was quoted by Nanyang Siang Pau as saying in a report today.
He said the RM245 million a year that is generated by having employees, employers and the government each contributing RM1 a month for every employee is more than enough to meet the amount need to pay laid-off workers who do not receive any compensation.
"We also feel that the EIS contribution should stop once the fund reaches a certain size; it should not go on non-stop," he said when asked to comment on the Employment Insurance System (EIS) Bill 2017, which was tabled for first reading in the Parliament on Monday.
Likening the EIS to insurance coverage for employees, he said it is not fair that only employers and employees are made to pay.
"The retrenchment rate is just 0.6%, (meaning) 99.4% of the employees do not face retrenchment risk. As such, EIS is a tax of sorts," he said.