Malaysia tables Employment Insurance System (Amendment) Bill 2025: What employers need to know at this stage

“The amendments also reflect the government’s continued commitment to ensuring Malaysia’s social protection system remains inclusive, sustainable and resilient, while enabling displaced workers to return to the job market faster and more effectively,” the HR Ministry added.

Malaysia's Dewan Rakyat saw the first reading of the Employment Insurance System (Amendment) Bill 2025 on 4 November (Tuesday).

The Bill, which seeks to expand coverage to include all job seekers and enhance benefits for insured employees, was tabled by the Malaysian Human Resources Minister Steven Sim. This amendment is in line with the decision of the Cabinet which agreed that the Employment Insurance System Act 2017 [Act 800] needs to be revised to be more dynamic and responsive to the current needs of the labour market. 

Through this amendment, several improvements were put forward, such as an increase in existing benefit rates and the introduction of a new benefit, namely the Mobility Assistance Allowance (EBM).

Here are some key highlights of the Employment Insurance System (Amendment) Bill 2025: 

Main amendments proposed

• Expansion of definitions
  • The bill updates several definitions to align with current employment practices and legal terminology.
  • This includes clearer definitions for terms like “employee,” “employer,” and “loss of employment.”
• Enhanced benefits
  • The bill proposes increased financial assistance for employees who lose their jobs.
  • New categories of benefits have been introduced, including:
    • Training allowance enhancements (raised to RM30/day from RM10–RM20)
    • Job search allowance adjustments
    • Support for career transition services
      
    • Mobility Assistance Allowance: One-off payment of RM1,000 for job seekers securing employment more than 100km from home.
    • Protection and training support worth up to RM25,000 for displaced workers.
• Eligibility criteria
  • The eligibility requirements have been revised for claiming benefits.
  • This includes provisions for gig workers and contract-based employees, the reflect the changing nature of their work.
• Contribution rates 
  • Contribution rates have been adjusted for both employees and employers to ensure sustainability of the fund.
  • This may include tiered contribution models based on income levels.
• Administrative improvements
  • This amendment aims to streamline processes for claims and appeals.
  • Enhancements to digital infrastructure will also be implemented for faster processing and tracking of claims.
• Compliance and enforcement
  • Enforcement mechanisms will be strengthened to ensure employers comply with contribution requirements.
  • Penalties for non-compliance and fraudulent claims will also be introduced. 
• Job Search Allowance structure
  • The Job Search Allowance structure remains unchanged, continuing to provide:
    • 80% of previous salary in the first month
    • 50% in the second month
    • 40% in the third and fourth months
    • 30% in the fifth and sixth months
  • Early Re-Employment Allowance
    • The Early Re-Employment Allowance will be raised to 50% from 25% of the remaining Job Search Allowance balance.

How the Employment Insurance System (Amendment) Bill 2025 will affect employers and employees

• Employers may need to update their payroll systems to reflect new contribution rates.
• Employees, especially those in non-traditional work arrangements, such as gig workers, may gain access to benefits previously unavailable.

Per an article by The Edge Malaysia, the HR Ministry (KESUMA) said the amendments mark an important step in strengthening Malaysia’s social protection framework and expanding employment services under the Employment Insurance System administered by the Social Security Organisation (PERKESO).

KESUMA added that the proposed changes aim to enhance benefits for insured workers who lose their jobs, promote labour mobility, improve PERKERSO's operational efficiency in re-employment programmes, and strengthen overall governance under the Employment Insurance System.

“The amendments also reflect the government’s continued commitment to ensuring Malaysia’s social protection system remains inclusive, sustainable and resilient, while enabling displaced workers to return to the job market faster and more effectively,” the ministry added.

As cited by Bernama, Datuk Mohamed Shafie BP Mammal, President, Union Network International-Malaysian Liaison Council (UNI-MLC), shared his thoughts on the Bill, saying it could strengthen the role of KESUMA in protecting workers and helping them return to the job market faster and more effectively. 

"The amendment to the bill aims to increase benefits for Social Security Organisation (Perkeso) contributors who have lost their jobs, promote workforce mobility, enhance Perkeso's operational efficiency in implementing re-employment programmes, and strengthen the governance of the Employment Insurance System (EIS).

"Through this amendment, several improvements have been introduced, including an increase in existing benefit rates and the introduction of a new benefit, namely the Mobility Assistance Allowance (EBM), which provides contributors who have lost their jobs with protection and training support of up to RM25,000," he added. 

The second and third readings are scheduled for the current meeting of the Dewan Rakyat which ends in December.

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