HR Related Regulatory Requirements - SOCSO

1. Who is categorized as an employee under the Employees' Social Security Act, 1969?

An employee is any person who is employed for wages under a contract of service or apprenticeship with an employer, whether the contract is expressed or implied or is oral or in writing, or in connection with the work of an industry to which the Act applies.

2. Is it compulsory for temporary employees to be covered under the Employees Social Security Act, 1969?

Yes. Temporary employees must be covered.

3. What an employer must do to inform PERKESO when an employee resigns?

Employer need to complete the Form 8A (Contribution Form) by writing the resignation date(in Column 1) and mark 'H' for resignation (in Column 2).

4. What is the age limit to contribute?

All employees are eligible to be registered, regardless of age. For workers aged 60 years and below, the employer must make contributions under the first category, but when the employee reaches 60 years of age, the employer will only pay contributions under the second category. Employees who join the workforce when they are above 55 years of age and who have never contributed must pay a contribution of the second category.

5. Is there any penalty imposed to the employer who fails to register/contribute?

An employer can be prosecuted and charged up to RM10,000 or jailed up to 2 years or both.

6. How are the contribution rates determined?

Employee contribution rate is based on the employee's wages, overtime, commissions, service charge, annual leave emoluments, sick leave, maternity leave, public holidays, incentives, meal allowance, cost of living and housing allowance and so forth. All payments whether hourly, daily, weekly or monthly-rated are considered wages. Monthly contribution rates for employers and employees is shown in the Contribution Schedule based on 45 salary categories.

7. How contributions can be paid?

Contribution payments can be made at all SOCSO offices and also at appointed banks such as Maybank Bhd, Public Bank and post offices (for Sabah & Sarawak). 

8. What is the rate of the contribution ascertained for an employee who stops work in the middle of the month?

An employer needs to make contribution payment based on the wages paid to the employee for the number of days worked in that month. For example, if salary is paid up to 15 th, then the contribution to be paid is based on 15 working days only.

9. How an accident can be reported and what are documents needed to make a claim?

For accidents at the work place, the employer has to notify SOCSO by filling in the Accident Report (Form 34) and submit punch cards or attendance records, medical certificate and a copy of the identity card to the SOCSO Office. If the accident occurs while commuting to and from work, these documents must be accompanied by a police report and sketch map of the route taken at the time of accident.

10. Does SOCSO's finance cost for medical treatment? Where the treatment is available?

Any employee who is involved in a work-related accident, commuting accident or has occupational disease is entitled to free medical treatment at SOCSO panel clinics, government clinics and government hospitals.

11.

Who is eligible for Constant Attendance Allowance?
This allowance is paid to an employee who suffers total permanent disablement or is severely incapacitated with a 100% loss of earning capacity or certified invalid and constantly requires personal attendance. His need for a care giver must be verified by a Medical Board or Appellate Medical Board. This allowance is equivalent to 40% of permanent disability benefits or invalidity pension and is subject to a maximum rate of RM500 per month (With effective from 1st January 2013 the sum is fixed at RM 500). Payment is made directly to beneficiaries.

12. How to process for MBO or medical board out for Permanent Disablement?
Determining the Question of Permanent Disablement
Assessment regarding permanent disability of an insured person can only be decided by the following authorities:-
  • Medical Board
  • Specialist Medical Board (for Occupational Disease)
  • Medical Appeal Board (if an Insured Person or SOCSO is not satisfied with the diagnosis made by the medical board

Application to refer to Medical Board

  • References to the medical board can be made by the following persons:
    • Insured Person who have completed their medical leave and is permanently disabled
    • Employer
    • Registered Trade Union representative
  • SOCSO is also allowed to refer insured person to the Medical Board if the medical leave is more than 180 days.
  • The time limit for any application to refer to the Medical Board is twelve months from the date of:
    • Last date of temporary disability
    • Employment injury if it does not involve any loss of disablement
    • Decision made by the Social Security Appellate Board to accept and allow the temporary disablement claims made subsequent to SOCSO rejecting such claims

References to Appellate Medical Board
Appeals to the Medical Appellate Board must be made within 90 days from the date of assessment by the Medical Board to the insured person.

Assessment and Payment
Claims will be referred to the Medical Board for permanent disability assessment.

1) If the assessment does not exceed 20%

  • Payment can be made in the form of lump sum.

2) If the assessment exceeds 20%

  • The employee is given an option to commute 1/5 of daily rate of the benefit into a lump sum payment while the balance will be paid monthly for life.
  • However, the option of lump sum payment is subjected to the aggregate loss of earning capacity as a replacement to any lump sum payment not exceeding 20%, if claims were previously made by the insured person
13.

Amendment to Employee's Social Security Act 1969 effective 1 June 2016

Key highlights of the amendment include:            

Amendment to Section 5:

•         5(1) - Expanding the coverage of the Act to all employees in industries to which the Act applies

            irrespective of the amount of wages.

•         5(2) - If the wages of an employee at any time exceeds  Ringgit Four Thousand (RM4,000) a month, his

           wages shall for the purposes of this Act be deemed to be RM4,000  a month.

With the above changes to Section 5 of the Act, the First Schedule is amended by deleting paragraph (1) which had previously excluded those who were earning RM3,000 and above per month.

In this regard, effective 1 June 2016:

•         Contributions to SOCSO must be made for all employees including those who had never been

           contributing to SOCSO prior to 1 June 2016 because they were earning above the maximum threshold of

           RM3,000 and were excluded;

•         Persons described in the revised First Schedule including foreign workers continue to be exempted from contribution.

 

 


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