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EIS contributions: Don’t let government off the hook

August 4, 2017

Government should show its commitment by channelling HRDF funds to help raise funds for the EIS.



By Charles Santiago

Sometimes, it’s really easy to misunderstand arguments raised.

Pledging support for employers is not my cup of tea. This is a well-known fact.

When looking at the Employment Insurance Scheme (EIS), a scheme under the federal government to protect retrenched workers, it’s obvious that the employers play a major role.

The reason I argued to keep costs low while implementing the scheme is to ensure that employers don’t seek the easy way out by taking on migrant workers, especially those who are undocumented.

To top that, employers could even bring in foreign workers.

Under the scheme, the government proposes that workers pay 0.5% of the monthly wages, a sum that would be matched by respective employers.

As we all know, employers pay towards EPF and Socso and are also losing out in terms of exchange rate plus a sliding economy.

It’s therefore important not to lose sight of the fact that increasing costs for employers could mean workers, who all of us are trying to protect, being thrown out of jobs.

Like I said, while I welcome the government’s initiative to lend a helping hand, there are many other cheaper and more sustainable ways of raising funds.

These include a proposed fund transfer from the Human Resources Development Fund (HRDF) to the tune of RM750 million, and a RM1 top-up by each and every worker, employer and the government on a monthly basis.

Why would capping the contribution of workers at RM1 be a bad strategy as the amount payable could go up to RM29.50 on a monthly basis?

It’s important to note that the government does not have a responsibility to raise funds, going by the current plan.

My argument is that the government must show its commitment and political will by channelling HRDF funds, which coupled with payments from workers, employers and the government, would amount to an annual income of RM19.2 million.

This is enough to cover retrenchment costs, leaving a surplus that would continue to grow yearly.

So this brings us to a pertinent question as to why PSM secretary-general A Sivarajan is letting the government off the hook as opposed to demanding that social safety nets are largely supported by the state.

It’s therefore crucial that those working closely with workers and advocating their rights shouldn’t shoot themselves in the foot or worse, allow their short-sightedness to compromise the well-being of workers.

Charles Santiago is DAP MP for Klang.

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Santiago: High EIS contributions will burden workers, employers


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