Kota Kinabalu: All employees must be registered and contribute to the Social Security Organisation (Socso) regardless of the amount of monthly salary under a single service contract when the Employees Social Security Amendment Act takes effect on June 1, this year.The compulsory requirement will come into force when the new Act extends its reach to employees earning a gross monthly salary of RM4,000 to be eligible for coverage.
Currently, only employees earning a monthly salary of not more than RM3,000 were eligible for coverage and employers have an option whether or not to register workers earning more than the figure.
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But the option for employers will no longer apply when the new Act takes effect as Socso registration and contribution will be made compulsory across the board.
The Government has increased the ceiling for monthly contributions from RM3,000 to RM4,000 for all workers and this will take effect on June 1.
Socso Chief Executive Dato Dr Mohammed Azman Dato Aziz Mohammed said, however, that the contribution rate for workers earning more than RM4,000 will be based on the RM4,000 ceiling while those earning less than that will go according to their gross monthly salary.
He did not deny that the increase will affect employers in terms of rising cost of operations but pointed out that it is only a small price to pay. On the contrary, he said employers could gain in the long term.
"The Government sees it as a small price to pay on the part of employers in carrying out their responsibility towards the wellbeing of workers under their payroll. We must remember when a worker has an accident or ill, he or she is provided with all kinds of benefits including medical facilities, other than cash benefits."
"And I wish to stress that under Act 4, employers enjoy the protection from any loss claims and compensations issued by workers under any other laws. Situations like this help to reduce their operation costs," he told some 300 employers who attended a briefing session on the Employees Social Security Act 2015 (Amendment) Bill 1969 to increase the ceiling for monthly contributions from RM3,000 to RM4,000 for all workers, Friday. His speech was delivered by his deputy, John Riba anak Marin.
Mohammed said the monthly contribution rates remain unchanged at 1.75 per cent for employers and 0.5 per cent for employees.
He also said Socso will increase cash payout benefits based on the new ceiling at RM105 and RM118 for temporary and permanent disability, respectively, whereas Invalidity and Survivor's Pension at RM2,567.50 monthly.
As for dependent's benefits, the maximum rate is RM3,555 per month.
In 1971 when it was established, Socso provided coverage to workers eligible to be insured up to RM500 monthly salary.
In 1985, it was increased to RM1,000 and RM2,000 in 1992 and later in 2005 to RM3,000.
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