SOCIAL PROTECTION FOR THE SELF-EMPLOYED


Food entrepreneurs such as Ramadan bazaar vendors stand to benefit if they contribute to SESSS that covers gig workers.

WEEKS ago, I visited Muhammad Hafizi bin Idris, a 34-year-old part time Foodpanda delivery rider who’s in coma for six months at Sungai Buloh Hospital’s neurosurgery ward.

Through the PERKESO Self Employment Social Security Scheme (SESSS), he receives temporary disability benefits worth RM7,000 and medical treatment, including ripple mattresses and diapers.

Yesterday, I visited the dependants of Mohamad Khairul Nizam Abdul Rashid after the accident and death of the Grab rider. Alhamdulillah, his family is protected under SESSS and receives dependants’ benefit worth RM1,395 monthly.

But not all riders are protected in the event of work injury or accidents.

In 2022, 33,421 claims were filed to PERKESO related to commuting accidents, of which 1,831 claimants were not covered due to insufficient or non-existent contributions in the PERKESO system.

‘Social protection is a fundamental human right and no one, including the families of these workers, should be left behind,’ says Dr Mohammed Azman.‘Social protection is a fundamental human right and no one, including the families of these workers, should be left behind,’ says Dr Mohammed Azman.

Of the thousands of accidents involving self-employed workers reported to PERKESO, more than 125 families did not qualify for social security benefits despite the loss of their breadwinner.

On average, 3.5 million Malaysian informal workers – including more than 740 thousand gig workers – are at risk of falling into poverty when they face extreme shocks and life contingencies due to lack of access to social protection.

Globalisation and technology have decentralised the traditional business models and provided avenues for the emergence of new forms of work such as gig or platform workers.

For this reason, more workers are shifting into informal employment, which offers more flexibility and simplicity than the average formal employment.

Following this trend, PERKESO established the SESSS under Act 789 in 2017 to protect all self-employed.

Strategically, PERKESO’s approach is to build a legislative framework to protect self-employed workers on a voluntary basis first before imposing mandatory contribution, and subsequently, automatic coverage.

The framework caters to the nature of self-employed jobs such as no employer-employee relationship, fluctuating income and flexibility of employment.

However, the burden of social security contribution, in many cases, is shouldered by individual self-employed workers, which deters participation under SESSS.

Platform providers or public regulators are not contributing on behalf of workers in the ecosystem.

During the pandemic, the government had implemented a matching contribution grant of 80% or full contribution grant to targeted self-employed workers under various programmes including SPS Khidmat and SPS Padanan Caruman.

Overall, the government initiative aims to reduce the financial burden of gig workers in paying contributions and promote awareness among the self-employed in various sectors to voluntarily contribute to SESSS.

Together with the government subsidies, PERKESO is slowly enforcing mandatory registration and contribution, starting with self-employed workers engaged in transport, and delivery of goods or food.

The federal gazette enables PERKESO to carry out enforcement activities through Bulan Pemutihan and Ops Kesan, which ensure that all workers are protected.

But behavioural economics taught me that compliance will never be 100%. Hence, PERKESO had initiated a collaboration with the Transport Ministry and Road Transport Department (JPJ) to design our implementation strategies.

It is important that government agencies integrate their processes and nudge e-hailing as well as p-hailing drivers towards automatic coverage.

For example, we can introduce PERKESO contributions as a criterion for the issuance and renewal of transport licences.

If we can insure our cars and motorcycles that drive us from one place to another, why can’t we also protect our bodies that work tirelessly to earn a living?

As announced under Budget 2023, PERKESO is expected to expand this strategy to all sectors of economic activities for self-employed workers.

Matching contributions from the government are extended in 2023 with a RM100mil allocation and targeted at vulnerable self-employed workers.

As PERKESO slowly leads and expands our coverage, I can also imagine other workers’ provisions such as occupational safety and health, retirement savings and minimum wage will soon follow to ensure a more comprehensive protection of self-employed workers in Malaysia.

I must emphasise that social protection is a fundamental human right and no one, including the families of these workers, should be left behind. Dr MOHAMMED AZMAN

AZIZ MOHAMMED

Chief Executive

PERKESO

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