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EIS moving into consultation phase

  • Some have suggested that the government should also share this burden with the employers and employees.

Sin Chew Daily

The Employment Insurance Scheme (EIS) passed in the first reading at the Dewan Rakyat last week has since raised controversies. Consequently the cabinet has appointed human resources minister Richard Riot Jaem, second finance minister Johari Abdul Ghani and ministers in the PM's department Wee Ka Siong and Paul Low to further deliberate on this matter with representatives of stakeholders.

The four ministers are expected to have a dialogue with the representatives later this week. The weird thing is that the government has never engaged itself in any dialogue with the relevant stakeholders before tabling the EIS bill.

Malaysian Employers Federation (MEF) has earlier complained that the government never consulted the employers or employees before tabling the bill in the Parliament.

If prior discussions have been held, for sure the bill would have taken into consideration more detailed aspects to meet the expectations of all quarters.

That said, it has been a good move on the part of the government to appoint the four ministers to consult the representatives from both the employers as well as employees, as there is this need to further clarify some of the controversial parts of the EIS bill.

The EIS is meant to protect the employees and make sure they continue to receive financial assistance in the event they lose their jobs. Such a measure to protect the interest of employees should be commended. However, there are factors we must take into consideration when putting EIS into actual implementation.

The most controversial part is the contribution amount. According to the bill, both employer and employee will each have to pay half of the contribution that goes from a low of 10 cents to a high of RM29.65 per month.

Personally, I do not think the amount is unaffordably high, but if we take into account the 6.8 million privately hired employees, the government will bag in additional billions of ringgit from EIS, which is a very large amount.

According to the estimates by MP for Kelana Jaya Wong Chen, the contributions collected by the government would outpace the payout by 6.7 times, hinting that the contribution amount has been unreasonably high and needs to be reviewed.

More importantly, when the government collects an excessive amount of EIS contributions, the same amount will be removed from the market, and this will not help stimulate commercial activities.

While offering protection to the employees, perhaps the government should also be consider the additional burden of employers so as not to increase their operating cost which in the end will have a negative impact on the overall market.

Employers are of the opinion that making employers and employees equally bear the contribution amount will increase their financial burden. Some have even suggested that the government should share this burden with the employers and employees.

The government will conduct in-depth studies into the feedback in hope of finding the best solution to ensure a win-win situation for all.


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