What Is the Employment Insurance System (EIS)?
The Employment Insurance System (EIS) was introduced on 1 January 2018 as a safety net for Malaysian workers who face retrenchment. Beyond financial aid, EIS also offers employment support services to help individuals regain stability and secure new job opportunities.
EIS benefits are divided into two main components:
- Financial Assistance – Temporary income support for retrenched employees.
- Employment Services Programmes – Job search assistance, retraining, and career counseling.
Who Is Eligible for EIS?
EIS applies to all local private sector employees who have been retrenched. However, certain groups are not eligible, including:
- Employees who resigned voluntarily.
- Those whose contracts were not renewed.
- Workers terminated for disciplinary reasons.
- Employees who have reached the mandatory retirement age.
Phases of EIS Implementation
The implementation of EIS was carried out in two phases:
- Phase 1 (2018): Focused on financial assistance for retrenched workers.
- Phase 2 (2019): Expanded to include employment services and retraining programmes.
EIS serves as a crucial safety net, ensuring that workers who lose their jobs unexpectedly have the financial and career support needed to transition smoothly into new employment opportunities.
EIS First Phase (Effective from 1 January 2018)
- Employers and employees each contribute 0.2% of the employee’s monthly salary to the EIS fund.
- Contributions are capped at RM4,000, meaning both employer and employee contribute a maximum of 0.2% of RM4,000, regardless of higher earnings.
- Funds collected are used for retrenchment benefits and support services, which began in 2019.
EIS Second Phase & Support Services (Effective 1 January 2019)
SOCSO assists retrenched workers with financial aid and job placement.
Job Search Allowance is paid for up to six months, based on the last drawn salary:
- Month 1: 80%
- Month 2: 50%
- Months 3 & 4: 40%
- Months 5 & 6: 30%
SOCSO collaborates with job agencies to help workers secure employment.
If a worker gets a job before six months, payments stop, and they receive a 25% bonus of the remaining allowance.
If retraining is needed, SOCSO covers up to RM4,000 in training fees and provides a daily allowance of RM10–RM20 for up to six months.
EIS 2025 Updates
- Higher Wage Ceiling – From January 2025, the salary cap for EIS contributions increases from RM5,000 to RM6,000, providing better support for higher-income employees.
- Expanded Coverage – The Employment Insurance System Act 2017 now includes all Malaysian citizens and permanent residents under formal employment.
- Updated Contribution Rates – With the new wage ceiling, employer and employee contribution rates have been adjusted to ensure sufficient financial support.
How to Apply for EIS Benefits
If you've been retrenched and need financial support, follow these steps:
1. File Your Claim Online:
- Visit the PERKESO EIS Portal: https://eis.perkeso.gov.my
- Register and log in using your MyKad details.
- Submit your retrenchment notice and other required documents.
2. Verification & Processing:
- PERKESO will review your application and confirm your eligibility.
- This process typically takes 14 working days.
3. Receive Your Benefits:
- If approved, you'll start receiving your Job Search Allowance (JSA) within one month.
- You must actively search for a job and submit proof of your job applications.
Conclusion
Employment laws and benefits change over time, so it's important for employers and employees to stay informed. Check official sources and seek HR advice to ensure compliance and make the most of EIS benefits.
For the latest updates, visit the PERKESO website or consult HR professionals.
Struggling After Job Loss? Here’s How EIS Can Support You