KUALA LUMPUR: The new Employment Insurance Scheme (SIP) for private sector employees will take effect from Jan 1, 2018 onwards.
Prime Minister Datuk Seri Najib Razak said the move will benefit some 6.5 million employees nationwide.
In a statement today, he said the insurance will provide financial assistance and provide new job opportunities for those who have lost their source of employment.
“This new social safety net is aimed at employees who have lost their employment source, to receive financial aid and find new employment,” said Najib in a statement today.
Under the SIP scheme, he said workers who lost their employment will receive temporary remuneration and will look for new jobs under a employment service programme,” he added.
“In addition, workers who lost their jobs will also undergo a retraining scheme to improve their skills and enhance their employability,” he added.
Najib, who is also Finance Minister, said the SIP will be funded via contributions from employees and employers, and will be managed by the Social Security Organisation.
He said the necessary laws for SIP are currently being drafted and are expected to be tabled in the June Parliament session.
“This law is expected to be enforced from Jan 1, 2018 onwards, whereas benefit payments can be made from Jan 1 2019,” Najib said.
The government believes that the implementation of the SIP is a long-term initiative, which will give a positive impact to employees and employer’s groups.
“Other nation’s experience shows that the SIP acts as an economic stabiliser and continues to maintain economic activity in a sustainable manner, especially during tough times,” Najib said.
He adds that the SIP will enhance the effectiveness of the labour market through matching offers and demands in a more efficient manner as well increase productivity and industrial competitiveness.