What Is The Employee Retention Programme (ERP) in Malaysia?

The Covid-19 pandemic has wreaked havoc on nearly every aspect of the economy in Malaysia. Many companies in Malaysia work to ensure the safety of their staff and clients, and many have had to make the difficult decision to seek unpaid leave from their employees. As a result, the Malaysian government has taken measures to assist businesses and their workers in weathering the storm together. One such measure implemented is the Employee Retention Programme (ERP) in Malaysia.

The Human Resources Ministry of Malaysia, through the Social Security Organisation (SOSCO), has introduced the Employee Retention Programme in Malaysia. This is part of the Economic Stimulus Package aimed at workers in the private sector whose employers were affected by the Covid-19 outbreak. To give you a better understanding of what this scheme entails, we have summarised the key highlights of the Employee Retention Programme in Malaysia in the FAQs below:

Related Read: What is Malaysia’s Short-Term Economic Recovery Plan (ERP)? »

1. What is Employee Retention Programme in Malaysia?

The Employee Retention Programme in Malaysia is a financial assistance given by the government to employees who have been asked to take No-Pay leave by their employers affected by the Covid-19 outbreak.

2. What is the financial incentive under Employee Retention Programme in Malaysia?

Each applicant can receive RM600 a month (up to maximum of 6 months) depending on the notice of No-Pay leave.

3. Who is eligible for Employee Retention Programme in Malaysia?

The following highlights the types of eligible employees who are entitled to receive the incentive from the Employee Retention Programme in Malaysia:

• Malaysian citizen only
• All private sector employees including temporary employees who have registered and are contributing to Malaysia Employment Insurance System (EIS)
• Only for employees with salary below RM4,000/month
• Employers who have implemented No-Pay leave (minimum 30 days) for a period between 1 to 6 months, with the No-Pay leave notice issued 1st March 2020 onwards

4. Who is not eligible for Employee Retention Programme in Malaysia?

Below highlights the following categories of employees who does not qualify for the Employee Retention Programme in Malaysia:

• Employees who did not contribute EIS in Malaysia
• Employees whose salaries are above RM4,000
• Employees who have stopped working
• Self employed
• Public government servants
• Foreign workers and expatriates

5. Who can submit the Employee Retention Programme Application in Malaysia?

The employer will apply on the behalf of their employees. Employers can submit their applications online in the Prihatin Perkeso portal.

Related Read: Wage Subsidy Program 2.0 »

6. What is the payment method?

The payment will be transferred to the employers’ bank account. Employers are required to transfer the payment to their employees within 7 days upon receiving the payments from SOCSO.

In summary, the Employee Retention Programme in Malaysia is a good government initiative to help businesses and workers in Malaysia to cope with the losses that the pandemic has brought. It is crucial that companies in Malaysia are updated on such schemes and measures. At WeCorporate, we are committed to help businesses navigate through such schemes during this tough period and ensure optimal benefits are received.

Christine

Christine is a content writer at WeCorporate whose focus is mainly on the business landscape in the APAC region. She also occasionally writes on trending topics and provides useful insights to aspiring entrepreneurs and seasoned businessmen alike.