PETALING JAYA: Several hawker associations are urging the Social Security Organisation (Socso) to provide more details of a mandatory contribution scheme affecting them, slated to come into force on Jan 1 next year.
Under the social security scheme for the self-employed (SKSPS), employees of licensed hawkers and traders will be required to contribute 0.5% of their monthly wages if they are below 60 years old, while their employers’ contribution rate is fixed at 1.75%.
Meanwhile, only employers are obliged to contribute for those above 60, but at a reduced rate of 1.25%.
Lim Huat Tat, who represents hawkers in Kuching and Samarahan, acknowledged the scheme’s benefits, but called on Socso to appreciate the unique challenges many of them face.
He said many hawkers are advanced in age or lack education and fear the new policy will adversely impact their finances and livelihood.
"These hawkers won’t bother with this unless it is cheap. They are unlikely to participate if the contributions are high but do not offer good coverage," said Lim.
Tan Chnan Yeang of the Malaysia-Singapore coffee shop proprietors’ general association said the policy is likely to burden small vendors, especially those who draw a low income.
"The government should implement policies to assist in their transition to this new system or grant them an exemption," he said.
Johor Bahru Small Business Association chairman Tey Tian Hwang said that while those who do not have insurance cover will benefit from the policy, some of its aspects remain unclear.
"The government should be lenient with hawkers and encourage them to comply," he said, adding that it should collaborate with trade unions for better dissemination of information about the scheme.
Socso has previously announced that it will work with local governments nationwide to increase awareness of the scheme beginning this month.
Meanwhile, Chai Hoong Sang, who runs a stall at the Petaling Jaya Old Town hawker centre, urged hawkers to discharge their social responsibility by participating in the SKSPS scheme, especially since their employees are unlikely to be able to afford medical insurance.
This will allow their employees to look to Socso for some financial support in the event of an accident, he said.
Lee Ngim Siong, a manager at the Rock Cafe hawker centre in Bandar Sunway, also supports the policy but expressed concern as to its viability given the high employee turnover rate.
"Many of them are only temporarily in this line of work," he said.
This is the third sector for which contributions under the SKSPS scheme have been made mandatory, following transport services in 2017, and the food and package delivery sectors in 2022.
