Employer And Employee Eligibility

Act And Regulations

Employees’ Social Security Act,1969 and Employees’ Social Security (General) Regulations, 1971 are applicable to all industries having one or more employees.

 

 

A. Employer

 

  • Employers are categorised into two (2), namely principal employer and immediate employer.

  1. Principal Employer
    An employer who employs an employee directly under a contract of service or apprenticeship. The employer is responsible for all matters relating to services and payment of wages.

  2. Immediate Employer
    An employer who employs employees to perform work under the supervision of the principal employer. This includes a person who has a contract of service with an employee and temporarily lends or leases the service of that employee to a principal employer.

  • Employer’s Responsibility
    The principal and immediate employers who employ one or more employees are responsible to register and contribute to Social Security Organisation (SOCSO) based on the rates specified under the Employees’ Social Security Act, 1969, administered by SOCSO.

    The principal employers are also responsible for ensuring that all workers employed by immediate employers are registered with SOCSO and the contributions are paid accordingly.

    Employers are responsible for reporting all work-related accidents that befall their workers within 48 hours of notification.

 

 

B. Employees


  • It is compulsory for all eligible employees who are Malaysian citizens and permanent residents to register.

 

Employee’s Eligibility
All employees who are employed under a contract of service or apprenticeship in the private sector and contractual / temporary staff of Federal / State Government as well as Federal / State Statutory Bodies need to be registered and covered by SOCSO. The rate of contribution is capped at monthly wage ceiling of RM4,000.00.

Employees exempted from the coverage of the Employees’ Social Security Act, 1969 are as follows:

  1. Federal and State Government permanent employees
  2. Domestic servants
  3. Self-employed
  4. Spouses of a sole proprietor or a partnership owner

 

 

 

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Registration of Employer and Employee

 

  • Employer and its employees must be registered with SOCSO not later than 30 days on which the Act becomes applicable to the industry.For the purpose of registration, an employer is required to complete the Employer’s Registration Form (Form 1), Employee’s Registration Form (Form 2) together with relevant documents specified (please get the checklist through our website or nearby office).



  • SOCSO shall be notified of any changes to the name, address, type of proprietorship, status of the employer or employees.

     

Registration of New Employees

  •  Employers who take on a new employee is eligible under the Act shall register the employee form 2, regardless of whether the employee ever registered and make contributions to SOCSO while working at a previous employer.

 

Employee’s Record

  • Every employer shall maintain a monthly record with following particulars for each employee:
    i.   Name
    ii.  National Registration Identity Card Number
    iii. Occupation
    iv. Contribution details
    v.  Monthly wages
    vi. Allowances

  • The employees record shall be maintained for seven (7) years from last entry date.

 

 

Cessation Of Being An Employer

  • Any employer who ceases to be an employer shall notify of such cessation by submitting to the Organisation using Form 1A together with other relevant documents within 30 days of such cessation.

 


Definition Of Wages

  • Any  remuneration payable in money to an employee is taken as wages for purposes of SOCSO contributions. This includes the following payments:
    i. Salary
    ii. Overtime payments
    iii. Commission and service charge
    iv. Payments for leave; such as annual, sick, maternity, rest day,
    public holidays and etc
    v. Allowances such as incentives, shift, food / meal, cost of living, housing and etc

  • All payments made to an employee paid at an hourly rate, daily rate, weekly rate, piece or task rate is considered as wages. However the following payments are not considered as wages:
    i. Payments by an employer to any statutory fund for employees
    ii. Mileage claims
    iii. Gratuity payments or payments for dismissal or retrenchments
    iv. Annual bonus

 

Note: For further clarification on definition of wages, kindly contact our SOCSO offices or Customer Service Careline at 1 300 22 8000.

 

 

 

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