What is a Wage Subsidy Programme and how to apply?
Based on the latest announcement by the Malaysian Government on 6 April 2020, there is a revision on the Wage Subsidy Programme (Program Subsidy Upah) give to Malaysian Companies.
Here is a summary of the Wage Subsidy Programme:
|Size||Micro & Small||Medium||Large|
|Number of Employees||< 75 employees||76 to 200 employees||> 200 employees|
|Subsidy available||RM1,200 monthly for each employee||RM800 monthly for each employee||RM600 monthly for each employee|
|Limitation on number of employees for subsidy||75||200||200|
|Subsidy Period||3 months||3 months||3 months|
|Reduction in sales||Not Applicable||Sales need to reduce by 50% or more between Jan-20 and following months||Sales need to reduce by 50% or more between Jan-20 and following months|
|Employer Registration|| • Both employer and employees need to register with Perkeso and contribute to Perkeso before 1st April 2020|
• Employer is registered with SSM or Local Authority before 1 Jan 2020
• Employer need to be in operation before 1 Jan 2020
|Eligible Employee Salary||Below RM4,000 per month|
|Other condition||Employer is not allowed to terminate, reduce salary or instruct employees to take unpaid leave within 6 months of the Wage Subsidy Programme effective date of 1st April 2020|
|Effective date||1 April 2020|
|Application date||9 Apr-2020 to 15 Sep-2020, employer can apply at www.prihatin.perkeso.gov.my|
|Subsidy Payment Mechanism||Will be credited to the employer bank account within 7-14 days from approval date|
FAQ in relation to Wage Subsidy Programme
1. What is Wage Subsidy Programme (“WSP”) or Program Subsidi Upah?
It is 3-month financial aid given to Employers for every Malaysian employees they employ with salary under RM4,000. The purpose is to assist the employers who are impacted by the COVID-19 outbreak to operate as usual and to retain their workforce.
2. When will Wage Subsidy Programme (“WSP”) or Program Subsidi Upah be effective and end?
The programme will be effective from 1 April 2020 and the last day for application will be on 15 September 2020. The programme will last for 3 months from approval date.
3. Who are not eligible for Wage Subsidy Programme (“WSP”) or Program Subsidi Upah?
- Employers or businesses register and operate after 1 January 2020
- Employers and employees have yet to register with or contribute to PERKESO
- Employees who are entitled to financial aid from Employment Retention Programme/ Program Pengekalan Pekerjaan in the same month
- Employees with salary more than RM4,000
- Employees who are no longer in employment
- Public servants, employees with federal and state statutory bodies, local authorities and self employed
- Foreign workers and expatriate
4. What documents are required to apply for Wage Subsidy Programme (“WSP”) or Program Subsidi Upah?
- Employer Bank Account Details (Extract of Bank Statement with Company Name, Bank and Bank Account number)
- Business Registration Number (the registered with bank when open the bank account)
- A copy of certificate of registration with SSM/Local Authority/Professional Body/Trade License
- Declaration Form PSU50 / Akuan Pengisytiharan PSU50
- List of employees (attached)
- Supporting documents to prove reduction in sales such as management accounts or sales report certified by management*
*For Medium and Large size companies only
5. What is Business Regsitration Number (BRN)?
- Business Regsitration Number (BRN) is the business registration number register with the bank when opening bank account.
- Employer need to provide the BRN for the purpose of Electronic Fund Transfer (EFT).
6. What is PSU50 Declaration Form/Akuan Pengisytiharan PSU50?
PSU50 Declaration Form/Akuan Pengisytiharan PSU50 is a declaration made by the employers that they agree to the terms and conditions set up in the form for the purpose of applying to Wage Subsidy Programme (“WSP”) or Program Subsidi Upah.
7. Why employees with salary more than RM4,000 are not covered under Wage Subsidy Programme (“WSP”) or Program Subsidi Upah even though they made monthly contribution to PERKESO?
Wage Subsidy Programme (“WSP”) or Program Subsidi Upah is a financial aid given by Government through Economic Stimulus Packages/Pakej Rangsangan Ekonomi (PRIHATIN) to assist employers affected by COVID-19 outbreak to continue operation and retain their workforce. This programme is also to assist employees under the B40 group who usually have income less than RM4,000 a month.
8. Do employers need to make new application for the second and third month for WSP?
Employers do not have to submit new application for second and third month. However, employers are required to update any changes in second or third month if there is any changes to the business or number of qualified employees through the system. Failure to do sure will have legal consequences.
9. Can employers who have started operation before 1 January 2020 but yet to register with PERKESO to apply for Wage Subsidy Programme (“WSP”) or Program Subsidi Upah?
Yes. All employer have yet to register with PERKESO can apply for Wage Subsidy Programme (“WSP”) or Program Subsidi Upah so long they fulfil the following criteria:
a) Already registered with SSM, Local Authorities, Professional Bodies before 1 January 2020
b) Have at least one employee
c) Registered with PERKESO
10. Can employers who have applied for Employment Retention Programme (ERP)/ Program Pengekalan Pekerjaan still apply for Wage Subsidy Programme (“WSP”) or Program Subsidi Upah?
Yes, employers who have fulfilled the conditions to apply for Wage Subsidy Programme (“WSP”) or Program Subsidi Upah can apply for WSP even if they have received ERP before. However, companies are not allowed to claim WSP for employees who have already received ERP for the same month.
11. Can the employer resubmit the application for Wage Subsidy Programme (“WSP”) or Program Subsidi Upah (announced on 6 April 2020) if they have applied for the WSP announced on 27 March 2020?
Yes. For employers who have submitted application to the WSP announced on 27 March 2020 and have more than 100 employees, they are allowed to submit new application to account for the remaining employees so long as the total employees not exceeding 200.
12. For company with more than 76 employees, how to prove reduction of sales of more than 50%?
The employers can provider supporting documents such as management accounts/sales report that the sales had dropped by more than 50% from January 2020 as compared to the following months.
13. My company have multiple departments/division/branches/units. Can I select a portion of my employee from specific departments/division/branches/units to apply for the Wage Subsidy Programme (“WSP”) or Program Subsidi Upah?
Yes. Employers can select any local employees whose salary are below RM4,000.
14. If the employer apply for the Wage Subsidy Programme (“WSP”) or Program Subsidi Upah in June 2020, can the subsidy be backdated to April 2020?
The subsidy will only be provided from the month of application and no backdated payment allowed.
15. If I do not apply to Wage Subsidy Programme (“WSP”) or Program Subsidi Upah am I allowed to terminate my employees anytime?
Yes. However, all employer should take note that any termination should be done in accordance to Employment Act 1955 and Industrial Relations Act 1967.
16. One of the conditions for Wage Subsidy Programme (“WSP”) or Program Subsidi Upah is to retain the employees for 6 months. If the employee decide to leave the company voluntarily and the employer has been receiving the subsidy before this, does the employer need to make new application?
No. If the employee leaves the company voluntarily within the first 3 months of the WSP, employer only have to update the information in the system. Failure to do so may lead to legal consequences.
17. Can the employee apply for WSP on their own.
No. All applications must be submitted by the employers
18. How will employers be notified that the application been approved or rejected?
The employers will be informed on the application status through email. List of approved employers will be published at PERKESO website; eiscentre.perkeso.gov.my together with the number of approved employees.
19. What is the definition of wage or income of RM4,000 and below under WSP
Wage or income will be defined in accordance to Employees’ Social Security Act 1969. All monetary payments given to employees such as gross salary / overtime/ commission /payment in respect of leave / service charges.
20. How should I pay the employees’ salaries if I participate in the WSP?
The employers should pay their employees the salary as usual and at the same rate and submit their application for WSP. The financial aid from WSP is for the employers. Monthly PERKESO and EIS contribution are still mandatory based on the salary given to employees.
21. If one employee working for Company A and Company B and both contribute to PERKESO, can both companies apply for WSP?
Yes. Both companies can apply for WSP so long they meet the conditions.
22. My company have both Malaysian employees and foreign employees but have not register with PERKESO. Can I register with PERKESO and apply WSP for my Malaysian employees only?
Yes. Employers need to register or contribute with PERKESO first before applying for WSP. This application is only eligible for Malaysian employees. Employers are required to submit a declaration on the total number of employees (both Malaysian and foreign employees). Note: the size of the company is defined based on number of employees (both Malaysian and foreign employees)
IMPORTANT NOTICE: This is a summarized version and for final reference, please refer to the statement issued by PERKESO.
If you require further assistance to apply for this subsidy, simple leave a message at here.