July 1, 2024
PETALING JAYA – From today, foreign workers will receive benefits under the Social Security Organisation’s (Socso) Invalidity Scheme, including 24-hour protection and funeral repatriation
The move, announced by Human Resources Minister Steven Sim in May, will allow for enhanced protection of foreigners, including expatriates and domestic workers, employed in Malaysia.
This will see additional costs for both foreign workers and employers, with industry players estimating that this can go up to over RM140mil a year for bosses alone.
Socso chief executive officer Datuk Seri Dr Mohammed Azman Aziz Mohammed said it is important to view these contributions towards workers’ safety nets as “investments, rather than burdens or extra costs”.
“These contributions provide essential protection and benefits for workers, ensuring their well-being and security in times of need.
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“Investing in these schemes helps create a safer and more secure working environment, ultimately benefiting both workers and employers,” he told The Star.
He said before the extension of the scheme to foreign workers, Socso had been reimbursing up to RM4,500 for the cost of funeral repatriation for non-employment related deaths as a part of its corporate social responsibility.
“Now that foreign workers are covered under the Invalidity Scheme, this cost is included as part of the benefits offered under the scheme,” said Dr Mohammed Azman, adding that the extension also aligns with the government’s efforts to meet international labour standards.
In May, Sim said the decision would allow Socso to save about RM25.38mil annually in expenses for the repatriation of bodies of foreign workers back to their home countries.
Dr Mohammed Azman said the 24-hour protection would also complement the current Employment Injury Scheme, which only covers work-related injuries.
“The coverage is aimed at ensuring the welfare of foreign workers who suffer from invalidity and who have met the condition of minimum contribution requirement of 24 months to receive monthly Invalidity Pension benefits for themselves or Survivor’s Pension for their dependants,” he added.
He said the contribution shares to Socso for the scheme by both employers and foreign workers “are mandatory”.
“In addition to this, employers can still enrol their foreign workers under private insurance if they choose to or as required by other authorities, such as the Health Insurance Scheme Foreign Workers under the Health Ministry,” Dr Mohammed Azman added.
Malaysian Employers Federation president Datuk Dr Syed Hussain Syed Husman said the move would improve Malaysia’s position among the international community for the treatment of migrant workers.
“The differences in Socso coverage for local and foreign workers have led to criticisms of discriminatory practices raised by international organisations against Malaysia,” he said in welcoming the move despite the additional costs.
Federation of Malaysian Manufacturers said the move would lead to a 0.5% increase in the employees’ monthly wages for the employers.
Its president Tan Sri Soh Thian Lai said that based on the 1.6 million migrant workers earning a minimum wage of RM1,500, this would total up to some RM144mil in additional costs annually,
“The move would bring the employer’s Socso contribution to 1.75% (from 1.25% previously under the Employment Injury Scheme) of the employees’ monthly wages. Workers will incur an extra 0.5% contribution of their monthly wages,” he said.
Soh suggested that the government review other insurance coverage – which is mandated by source countries – for migrant workers to ensure no duplication.
“Overall, while the extension is a progressive move towards inclusive social protection, it also presents new challenges for businesses that will need to adapt to the additional financial responsibilities, including having to review their dependence on foreign workers given the increasing cost and obligations,” he added.