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Govt agrees to reduce EIS contribution rate
Published on: Sunday, August 13, 2017

Kuala Lumpur: The Government has agreed in principle to reduce the contribution rate for the Employment Insurance Scheme (EIS) from 0.5 to 0.2 per cent of a monthly salary.

The agreement was reached during a meeting on Thursday between representatives of the Government led by Minister of Finance II Datuk Seri Johari Abdul Gani and three other ministers, employers and trade unionists, a source familiar with the matter said.

"The Minister heeded the concerns raised by both workers and employers and all parties have in principle agreed that the rate of contribution would be 0.2 per cent," the source told Malay Mail Online.

Malaysian Trade Union Congress (MTUC) Secretary General, J. Solomon, when contacted, confirmed that the meeting took place.

"Johari also told us that he would be putting this forward to Friday's Cabinet meeting for them to make a decision," he said.

The positive outcome of the meeting could finally put the controversy over the issue to rest and allow the Government to move forward and table a new EIS Bill as early as October.

"We agreed to the new rate because we wanted this to proceed we don't want any further delay," Solomon said when asked to comment on the matter.

"As far as the MTUC is concerned, we are happy with the outcome of the meeting and we are quite happy that the Government has taken note of the concerns of the workers," he added.

Putrajaya was forced to retract the Bill following strong objection from workers and employers who felt that the statutory contribution amount proposed was too high and disproportionate to the number of retrenched workers.

Putrajaya had initially proposed a rate of 0.5 per cent of a monthly salary when MTUC and the Malaysian Employers Federation had agreed that a monthly contribution of RM1 from each worker, employers and the Government should suffice.

It is understood that the Government has also agreed to look into other concerns regarding the administration of the fund.

One of the key issues raised by the MTUC was the members' composition of the committee overlooking the EIS, which was heavily represented by bureaucrats.

"The Minister had pledged to iron out those issues in the tripartite meeting that is to be held soon," said Solomon.

The EIS, which would allow retrenched workers to claim a portion of their insured salary for between three and six months of unemployment as well as allowances, was tabled for the first reading in the Dewan Rakyat last week.

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