Increase in SOCSO contributions and changes to the Act,  starting June 2016

Increase in SOCSO contributions and changes to the Act, starting June 2016

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SOCSO has announced the Amendments to the Employees Social Security Act, 1969. These amendments come into effect on 1st June 2016. The links to the relevant pages can be found at the bottom of this article.

In interacting with Actpay Payroll users, we found that a surprisingly large number of employers are not aware of these changes and their implications.

The primary change to the act is the increase in the maximum salary subject to SOCSO contributions from RM3,000 to RM 4,000. As stated in clause 1 of the amendments.

1.The ceiling of wage for contribution payment has been raised from RM3,000.00 per month to RM4,000.00 per month;

But, clause 2 and 4 are the major changes.

2. All employees who are employed under a contract of service or apprenticeship in the private sector and contractual/temporary staff of Federal/State Government as well as Federal/State Statutory Bodies need to be insured under the Employees’ Social Security Act, 1969 by operations of law regardless of their salary. However, contribution will be capped at monthly remuneration of RM4,000.00.

This clause states that those who are not contributing to SOCSO at the moment will now have to be registered and start contributing to SOCSO irrespective of salary.

4. Unregistered employers with employees not liable under the Act (have never paid SOCSO contributions), ought to register themselves and their workers through Employer/Employee Registration Forms (Form 1 & 2) and send the same to the nearest SOCSO Office with supporting documents.

Similarly companies that have not been paying SOCSO till now, will have to register themselves and start contributing to SOCSO.

Some important excerpts from the SOCSO FAQ. The following clauses from the FAQ generally state that all employees have to contribute to SOCSO from now on.

2.1 Seseorang pekerja yang menerima gaji amaunnya melebihi RM4,000.00 sebulan diwajibkan mencarum selepas pindaan ini tidak kira berapa jumlah gaji yang diterima daripada
majikannya.

11.1 Semua majikan yang tidak pernah mendaftar tetapi mempunyai pekerja hendaklah mendaftarkan perusahaan dan pekerja mereka dengan PERKESO dalam tempoh 30 hari tanpa mengambilkira gaji yang diterima oleh pekerja mereka kecuali kategori pekerja yang dikecualikan dalam Jadual Pertama Akta 4.

11.3 Konsep “Notis Pilihan” dan “Sekali Layak Terus Layak” tidak lagi relevan dari aspek pendaftaran kerana semua pekerja akan dilindungi tanpa pilihan.

 

Base on the new act, and additional 500,000 new employees will be begin to contribute to SOCSO.

12. Anggaran bilangan pekerja baharu yang bakal dilindungi oleh PERKESO adalah seramai 500,000 orang.

 

The table below shows a summary of the increase in SOCSO contributions from RM3,000 to RM4,000.

RATE OF CONTRIBUTIONS
No. Actual monthly wage of the month First Category
(Employment Injury Scheme and Invalidity Scheme)
Second Category
(Employment Injury Scheme)
Employer’s
Contribution
Employee’s
Contribution
Total
Contribution
Contribution by Employer only
34. When wages exceed RM2,900 but not RM3,000 RM51.65 RM14.75 RM66.40 RM36.90
44. When wages exceed RM3,900 but not RM4,000 RM69.05 RM19.75 RM88.80 RM49.40
TOTAL Difference RM 17.40 RM5.00 RM22.40 RM12.50

The announcement can be found here : http://www.perkeso.gov.my/en/component/k2/item/3191-amendments-to-employee-s-social-security-act.html

The FAQ can be found here : http://www.perkeso.gov.my/images/pengumuman/FAQ_RUU_PINDAAN__2015_bertarikh_30_mei_2016.pdf

The New contribution tables can be found here : http://www.perkeso.gov.my/en/component/k2/item/3771.html

 

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