Non-compliance leaving nearly one in five workers without protection
Some employers in Malaysia have yet to register their employees for work protection schemes under the country's Social Security Organisation (Perkeso), according to reports, leaving their workers without essential social security coverage.
Datuk Seri Dr Mohammed Azman Aziz Mohammed, chief executive officer of the Perkeso group, said between 17 and 20% of employers have not yet registered their workers for protection schemes, the New Straits Times reported.
This is despite their mandate to register employees for work protection schemes within 30 days of hiring, as stipulated in the Employees' Social Security Act 1969.
Non-compliance was rampant in the hospitality, food and beverage, manufacturing, wholesale, and retail sectors, according to Azman.
It has also resulted in 17,482 summonses or compound notices since 2022, as well as RM3,937,555 in fines collected since 2020.
Millions left without coverage
Employers' non-compliance in registering their workforce has left millions of workers without social security coverage.
According to Azman, there are only 10.05 million active employees registered in Perkeso's records, short of the 12.56 million employees reported by the Statistics Department.
He noted that the high rate of non-compliance among employers has led to nearly one in five workers being found without workplace accident coverage.
Case of foreign workers
Meanwhile, Azman said Perkeso is still determining the compliance rate for employers with foreign employees, stating that there are various challenges such as constant new entries, renewals, repatriations, as well as database discrepancies.
But he revealed that non-compliance is high in construction, plantation and agriculture, manufacturing, as well as services such as cleaning, hospitality, and security, the NST reported.
Employers cited ignorance or confusion for non-compliance, according to the Perkeso chief.
To address the issue, Azman said they are now requiring employers to register foreign workers for coverage before issuing work permits.
"This proactive approach aims to ensure that all eligible foreign workers are covered under Malaysia's social protection system from the outset of employment," he said.
It has also intensified enforcement in high-risk industries, and commenced multilingual campaigns to raise awareness.
