Amendments to Employees’ Social Security Act 1969

Amendments to Employees’ Social Security Act 1969

Prior to 1 June 2016, only employees earning less than RM3,000 per month were obliged to contribute to the Social Security Organisation (SOCSO). The “once in, always in” principle applicable to membership meant that even if an employee’s wage were raised above RM3,000 per month on a subsequent date, he would remain a member of SOSCO and would therefore continue to contribute monthly.

Effective 1 June 2016, the Employees’ Social Security Act 1969 (Act 4) has been amended pursuant to the Employees’ Social Security (Amendment) Act 2016 [Act A1508] to apply to all Malaysian employees including a permanent resident (except those excluded under the First Schedule of the Employees’ Social Security Act 1969) who are employed under a contract of service or apprenticeship with an employer irrespective of their wages. However, should an employee’s wages exceed RM4,000 a month, his wages shall for the purposes of the Employees’ Social Security Act 1969 be deemed to be RM4,000 per month (see s 5(2) of the Employees’ Social Security Act 1969).

In this regard, the ceiling of wages for contribution has been raised from RM3,000 to RM4,000 per month. The increase in the ceiling of wages will result in the employee’s maximum monthly contribution being raised from RM14.75 to RM19.75, and the employer’s maximum monthly contribution from RM51.65 to RM69.05.

For affected employees, employers are required to furnish the employees’ details in Form 2 and send it to the nearest SOCSO office