The Malaysian Government has announced a follow-up to the current Wage Subsidy Programme (PSU), which ended on 30 September 2020. Termed the Wage Subsidy Programme 2.0 (PSU2.0), only companies that are still facing an income loss of more than 30% compared to the previous year since the start of the MCO can apply.
This requirement differs from the earlier Wage Subsidy Programme, which was open to employers who suffered an income loss of more than 50% since 1 January 2020. From the directive obtained from SOCSO on 23 September 2020, WeCorporate has summarized the FAQs on the Wage Subsidy Programme 2.0 below.
Table of Contents
- PSU and PSU2.0?
- PSU2.0 Implementation
- PSU2.0 Application Deadline
- How can Employers Qualify for PSU2.0
- Ineligibility for PSU2.0
- Documents required for PSU2.0
- Business Registration Number
- PSU2.0 Declaration
- Types of Wages for PSU2.0 Application
- Applying for PSU2.0
- How can Employers check application status?
- SOCSO and EIS Payment by Employers
- Employee actions for wage disputes
- Penalty for non-compliance
- Calculating size of company workforce
- Multiple employer codes registration on SOCSO
1. What is Wage Subsidy Programme and Wage Subsidy Programme 2.0?
- Wage Subsidy Programme (PSU) and Wage Subsidy Programme 2.0 (PSU2.0) are financial assistance programs paid to employers for all local employees earning RM4,000 or less.
- Applications for PSU began on 1 April and ended on 30 September 2020.
- Under the PRIHATIN economic stimulus package announced on 27 March 2020, PSU has subsidised wages for 3 months. Under the PENJANA national economic recovery plan announced on the 27th of June, PSU was extended for an additional 3 months (bringing the total number of months to 6).
- On the 23rd of September 2020, the Prime Minister announced that the PSU will be extended for an additional 3 months for existing employers receiving it; while businesses that have yet to apply for PSU may receive 6 months of aid in total. This program is known as the Wage Subsidy Programme 2.0.
- The PSU aims to support businesses that have been impacted by the Covid-19 crises’ economic effects and prevents workers from losing their jobs and source of income.
Related Read: Find out how you can benefit from Malaysia’s Short-Term Economic Recovery Plan »
2. When will the Wage Subsidy Programme 2.0 be implemented?
PSU2.0 applications will be open to employers on 1 October 2020.
3. When is the deadline for Wage Subsidy Programme 2.0 applications?
All PSU2.0 applications must be submitted by 31 December 2020.
Related Read: What are the 3 Definitions of SMEs in Malaysia? »
4. How do employers qualify for the Wage Subsidy Programme 2.0?
Please refer to Table 1:
How can employers prove that their sales / revenue have decreased by at least 30%?
Employers may provide concrete monthly sales figures when applying on the Prihatin Perkeso portal. The figures should show that sales or revenue in a certain month decreased by at least 30% compared to the same month in the previous year after the RMCO.
Examples:
| Month / Year | Sales / Revenue |
|---|---|
| September 2019 | RM 100,000 |
| September 2020 | RM 69,500 |
| August 2019 | RM 120,000 |
| August 2020 | RM 78,000 |
5. Who is ineligible for the Wage Subsidy Programme 2.0?
- Employers and employees who have not registered with or contributed to SOCSO before 1 September 2020;
- Employers who registered with the SSM / ROS / ROB/ relevant local authority and began operating on or after 1 September 2020;
- Employers who are not registered with the Inland Revenue Board (IRB);
- Retrenched employees;
- Employees hired under the Penjana Kerjaya Hiring Incentive Program;
- Civil servants, employees of statutory bodies at both state and federal levels, employees of local authorities, and the self-employed (including freelancers);
- Foreign workers and expatriates;
- Employers who withdrew their successful PSU applications from 15 June 2020 onwards and
- Employees who earn more than RM4,000 a month
Despite their SOCSO contribution, employees earning more than RM4,000 a month are ineligible for PSU2.0.
The Government introduced the PRIHATIN economic stimulus package, which includes the PSU2.0, to assist employers negatively impacted by Covid-19 with continuing their business operations and retaining their employees. Employees earning RM4,000 or less a month are prioritised as low-income workers, as they are more likely to be negatively impacted if they face retrenchment due to Covid-19.
6. What documents are required for Wage Subsidy Programme 2.0 application?
The documents are:
- Names of eligible employees (based on the size of the company);
- The employer’s bank account information (copy of first page of the bank statement);
- The Business Registration Number (BRN) used to open the company bank account (please refer to the bank to avoid confusion);
- A copy of SSM / ROS / ROB / relevant local authority registration certificate; and
- The PSU2.0 Declaration Form
Related Read: What are the 3 Definitions of SMEs in Malaysia? »
7. What is Business Registration Number (BRN)?
- Business Registration Number (BRN) is the company registration number provided to the bank when opening the company bank account.
- Employees should request the BRN directly from their banks to ensure accuracy.
- Employers must download, complete, and upload the BRN Form on the Prihatin Perkeso portal together with their application.
8. What is PSU2.0 Declaration Form?
The PSU2.0 Declaration Form serves as a written confirmation that the employer declares all information provided to be factual and accurate.
9. Types of Wages qualified for Wage Subsidy Programme 2.0 application?
Wages are defined as per the 1969 Employees’ Social Security Act (Act 4). All remuneration in cash e.g. basic salary / overtime / commission / payments in lieu of annual leave, sick leave, maternity leave, public holidays / service charges count as wages. Wages are also subjected to RM 4,000 ceiling.
10. Applying for Wage Subsidy Programme 2.0
The below highlights some of the common cases faced by employers when applying for Wage Subsidy Programme 2.0. The cases include both first time application and subsequent re-applications.
Do employers currently receiving PSU subsidies need to reapply for PSU2.0? |
| Employers currently receiving PSU subsidies must apply for PSU2.0 on the Prihatin Perkeso portal from 1 October 2020. |
After the first PSU2.0 application approval, do employers need to reapply? |
|
My business started operating before 1 September 2020, but I am not registered with SOCSO. Can I apply for PSU2.0? |
| Employers must register with SOCSO as well as SSM / relevant local authorities / any other professional associations before 1 September 2020 and employ at least one local worker to qualify for the PSU2.0. |
An employer registered with SOCSO prior to 1 September 2020. S/he has an employee not registered with SOCSO who started working on 1 February 2020. Can the employer apply for PSU2.0? |
| The employer can apply for the PSU2.0. However, the employee must start working and be registered under the employer (on SOCSO’s ASSIST portal) prior to 1 September 2020. |
My PSU application was approved in June 2020. Can I apply for PSU2.0? |
| Yes, employers who fulfill all conditions listed in Table 1 (Q4 (d)) by 31 December 2020 can apply for PSU2.0. Successful applicants will receive subsidies for an extra 3 months. |
My PSU application was previously rejected. Can I apply for the PSU2.0? |
| Yes, employers who fulfill all conditions listed in Table 1 (Q4 (d)) by 31 December 2020 can apply for PSU2.0 on the Prihatin Perkeso portal. |
An employer’s PSU application was approved but some applications of employees were rejected as they were not registered with SOCSO prior to 1 April 2020. Can the employer apply for PSU2.0 on behalf of these employees? |
| Yes. The employer can submit a PSU application for the registered employees after April 1, 2020. The employer will receive the wage subsidy at the rate of RM600 monthly per employee for only three months under PSU2.0 by fulfilling the eligibility requirements in Table 1 (Question 4 (d)). |
My employee resigned voluntarily after receiving both PSU and PSU2.0. Do I need to reapply? |
|
No, employers do not need to reapply. They only need to update the list of eligible employees by the 15th of the month on the Prihatin Perkeso portal. Failure to report any changes may result in legal action. |
11. How can employers check their Wage Subsidy Programme 2.0 application status?
- Employers will receive a reference number after they complete their application on the Prihatin Perkeso portal. They may check their application status by entering their reference number.
- A list of approved employers (including the number of employees approved) may also be found on the EIS portal.
12. Payment of SOCSO and EIS Contribution by Employers
Below refers to the commonly asked questions on payment for SOCSO and EIS contributions made by employers:
Do employers still need to pay SOCSO and EIS contributions after receiving PSU and PSU2.0 aid? |
| Yes, employers must pay contributions as mandated by Act 4 and Act 800. |
Can employers utilise a portion of their PSU or PSU2.0 aid to pay their share of SOCSO and EIS contributions? |
| No, employers may not utilise any of their PSU or PSU2.0 aid to pay their share of SOCSO and EIS contributions. |
Do employers need to pay contributions on behalf of employees on unpaid leave who are receiving PSU or PSU2.0 aid? |
|
Yes, employers must pay SOCSO and EIS contributions when salaries are paid each month as usual. |
13. What can employees do for wage disputes?
Employees can refer to the following actions below if their employer withholds wages, reduces wages, orders them to take unpaid leave or retrenches them despite receiving PSU or PSU2.0 subsidies:
- Employees may check whether their employer has successfully applied for the PSU on the EIS portal.
- They may also submit a complaint here.
- Any other labour disputes may be referred to the Department of Labour (JTK).
14. Penalty for Employers for Non-compliance with SOCSO regulations
If an employer is proven to have defied PSU and PSU2.0 regulations, SOCSO has the right to suspend all future payments and reclaim any money that has been paid to the employer. The employer may also face legal action.
15. Calculating Size of Company Workforce
My company employs both local and foreigner workers who are registered with SOCSO. May I leave out foreign workers when calculating the size of my company workforce? |
| No, employers must include all employees in their declaration including their foreign workers. |
For PSU2.0 application purposes, are employers also considered as employees when calculating the size of their company workforce? |
|
For PSU2.0 application purposes, employees will be defined using the definition stipulated in Act 4 of the 1969 Employees’ Social Security Act. |
16. Multiple employer codes registration on SOCSO
An employer has registered multiple employer codes on SOCSO’s ASSIST portal. Are PSU and PSU2.0 payments made based on the multiple different employer codes or the employer only? |
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Therefore, the Wage Subsidy Programme 2.0 is a good financial assistance programme geared towards employers of companies in Malaysia to reduce the high costs in the new normal brought by the pandemic. At WeCorporate, we offer payroll outsourcing services to help your business navigate through such schemes available. Talk to us today and soar your businesses to greater heights!
Please note that this publication is based on the publicly available information and may change from time to time.
FAQs
- Employers should have submitted their applications for the Wage Subsidy Programme 2.0 by 31 December 2020.
- The following documents are required for the application:
- Names of eligible employees
- Employer’s bank account information (copy of first page of the bank statement)
- Business Registration Number (BRN) used to open the company bank account
- Copy of SSM / ROS / ROB / relevant local authority registration certificate
- PSU2.0 Declaration Form
Related Read: What are the 3 Definitions of SMEs in Malaysia? »
- Employers must apply for Wage Subsidy Programme 2.0 even if they are currently receiving PSU subsidies. They can apply through the Prihatin Perkeso portal from 1 October 2020.
- If an employer is proven to have defied PSU and PSU2.0 regulations, SOCSO has the right to suspend all future payments and reclaim any money previously paid to the employer. The employer may also be subjected to legal action.
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