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IMPACT – MEDIUM
Important announcement: Employers in Malaysia must register their foreign workers, including expatriates who hold valid documents, with Malaysia’s Social Security Organization (SOCSO) for Employment Injury Scheme (EIS) benefits.
What is the change? The changes went into effect for employers starting with their Jan. 1 payrolls. Their contributions to SOCSO for foreign workers are due on the 15th of every month, starting in February. These employer contributions are mandatory until foreign workers cease their employment in Malaysia.
What do these benefits include? The EIS benefits offer protection for employees against accident or occupational illness arising out of, or in the course of, employment. This includes medical, temporary/permanent disablement, rehabilitation, and dependent’s benefits; constant attendance allowance; and 6,500 ringgit for repatriation costs.
What is not included? Benefits under the Invalidity Scheme and protection for employees who suffer invalidity or death due to any cause unrelated to employment will not be extended to foreign workers.
Background: Previously, Malaysia only provided Malaysian citizens or permanent residents with EIS benefits through SOCSO.
Analysis & Comments: The Malaysian government’s decision to require EIS protection for all foreign workers, including expatriates, is in line with the International Labor Organization’s Equality of Treatment (Accident Compensation) Convention, and the Conference Committee on the Application of Standards. With these changes, all foreign workers in Malaysia are now afforded the same EIS benefits as local employees.
Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.
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