Meeting the requirements for wage subsidy

THE following are some pointers on wage subsidy as announced by the government recently.

Q: What is wage subsidy?

A: Wage subsidy falls under the government’s efforts to encourage employers to retain their employees. It is a subsidy worth RM600 channelled to employers for every employee who earns RM4,000 and below (limited to 100 employees) for three months.Q: What is the objective of the wage subsidy?

A: i. To assist employers who are affected from an economic standpoint by Covid-19 so that they can continue their operations and retain their employees.

ii. To stop employees from being fired and losing their income. Q: When will the wage subsidy start?

A: It will come into effect on April 1,2020. Q: How long is the wage subsidy period?

A: It will last for three months. Q: What are the eligibility requirements for the wage subsidy?

A: i. Both employers and employees need to be registered and have contributed to the Employment Insurance Scheme (EIS).

ii. Employers need to make a declaration that they have suffered a 50% decrease in revenue by comparing revenue for January 2020 with the following months.

iii. Eligible for employees with monthly income of RM4,000 and below and is limited to 100 employees only per employer from any sector.

iv. Employers have to ensure they do not fire their employees, ask employees to take unpaid leave or slash the salaries of existing employees while the employers are receiving the wage subsidy for three months, and another three months following the period.Q: What is the difference between the Employment Retention Programme (ERP) and wage subsidy programme?

A: i. ERP is a form of assistance of RM600 a month per employee given through their employers for a period of six months. Wage subsidy is a subsidy on wages for RM600 per month to be paid by employers to their employees for a period of three months.

ii. ERP is only bound to an unpaid leave notice agreed upon by an employee and his or her employer; while wage subsidy is an initiative to help employers continue with their companies’ operation and reduce the risk of employers taking actions such as slashing salaries, cutting down work days, deducting annual leave of employees or taking more drastic action such as firing employees.

iii. Employers who have seen a decrease in revenue of more than 50% since January 2020. Q: Who is ineligible for wage subsidy?

A: i. Employers and employees who did not register or contribute to the EIS from Socso.

ii. An employee who is also receiving the ERP assistance in the same month.

iii. Employees with salaries of more than RM4,000 a month.

iv. Employees whose services were terminated.

v. Public sector employees; and employees of statutory bodies and local authorities (PBT).

vi. Self-employed persons, including freelancers.

vii. Foreign workers and traders.Q: Who can submit an application for the wage subsidy?A: Only employers can submit the application.

Q: When can the application for wage subsidy be submitted?

A: Employers can submit their application from April 1 2020, at prihatin.perkeso.gov.myQ: What are the documents needed for the wage subsidy application?

A: i. list of the employees (limited to 100 employees).

ii. Bank account details of the employers.

iii. Copy of the employers’ panel bank registration (pengenalan pendaftaran bank panel majikan)/MyCOID.

iv. Copy of the employers’ Companies Commission of Malaysia (SSM)/ROS/ROB registration.

v. Declaration of announcement of PSU50

vi. Other supporting documents such as financial statements or sales reports that have been verified by the management.