
Extension of SOCSO Invalidity Scheme Coverage to Foreign Workers Effective 1 July 2024
A significant update from the Social Security Organisation (SOCSO) involves the extension of the Invalidity Scheme coverage to foreign workers in Malaysia.
Effective from 1 July 2024, all foreign workers, including expatriates, will be required to contribute the same as local workers under Category 1, which encompasses both the Employee and Employer contributions. This change is mandated by the Employees’ Social Security Act 1969 (Act 4).
Key Points
Obligation for Employers
Employers who employ foreign workers, including expatriates and foreign domestic workers, must ensure these employees are protected under the Invalidity Scheme.
Coverage Requirement
Foreign workers must possess a valid pass or permit issued by the Director General of Immigration for employment in Malaysia. All employers must mandatorily contribute to SOCSO for their foreign workers.
Contribution Categories
- First Category Contribution (Employment Injury Scheme and Invalidity Scheme): Applicable for foreign workers entering the PERKESO scheme for the first time under the age of 55.
- Second Category Contribution (Employment Injury Scheme): Applicable for foreign workers who have reached 55 years old or older when first entering the PERKESO scheme. Also applicable for foreign workers who have reached 60 years old and are still working.
Implementation
For new employee notifications (foreign workers) in the Assist Portal, relevant forms must be filled out, updated, and uploaded. These forms are not required for existing employees.
- Borang Pendaftaran Pekerja Asing (Foreign Worker Registration Form)
- Borang Pengisytiharan Orang Tanggungan Pekerja Asing (Foreign Worker Dependent Declaration Form)
Currently, all foreign workers and expatriates are contributing under Category 2. Employers who employ foreign workers must ensure changes to Category 1 contributions are implemented starting from this month (July 2024) in the payroll system.
The Invalidity Scheme extension for foreign workers provides 24-hour protection and covers funeral repatriation costs. This change will increase costs for employers, raising the employer’s contribution to 1.75% of monthly wages from the current 1.25%.
SOCSO CEO Datuk Seri Dr. Mohammed Azman Aziz Mohammed emphasized that these contributions should be seen as investments rather than extra costs. They offer essential protection and benefits for workers, ensuring their well-being and security in times of need.
Previously, SOCSO covered funeral repatriation costs as part of its corporate social responsibility. With this extension, these costs are now included in the Invalidity Scheme benefits, providing comprehensive coverage for foreign workers.
This extension aligns with the government’s efforts to meet international labour standards and enhance Malaysia’s reputation in the global community regarding the treatment of migrant workers. Although the additional costs pose new challenges for businesses, this is a progressive step towards inclusive social protection.
Click here to view the Employer’s Circular from SOCSO: Employer’s Circular
For any further information or assistance, please contact SOCSO Customer Service at 1-300-22-8000.