KUALA LUMPUR: The Federation of Malaysian Manufacturing (FMM) welcomes the tabling of the Employment Insurance System (Amendment) Bill 2025 by Human Resources Minister Steven Sim for first reading in Parliament on Nov 4.
This Bill represents an important step toward strengthening Malaysia’s social protection framework under the Employment Insurance System (EIS) administered by PERKESO.
The proposed enhancements, including the increase in training fee ceilings from RM4,000 to RM7,000, the daily training allowance of RM30 and the improved early re-employment allowance from 25% to 50% of unpaid Job Search Allowance, reflect the government’s commitment to advancing active labour market policies. These measures are expected to encourage upskilling and improve job-matching, particularly in emerging and high demand sectors.
“FMM views these enhancements positively as they complement industry efforts to build a resilient and future-ready Malaysian workforce.
“In particular, the introduction of the Mobility Assistance Allowance is a timely and practical initiative to support relocation for employment, easing labour mismatches across regions and strengthening talent mobility,” said FMM president Tan Sri Soh Thian Lai.
However, FMM underscores that programme expansion must go hand-in-hand with strong financial discipline, governance, and demonstrated impact. It is imperative that every ringgit channelled through the EIS results in measurable employability improvements and sustainable job placements, and not simply training participation.
“FMM calls for strict governance and accountability over training allocations to prevent any form of abuse or leakage, supported by robust monitoring and transparent reporting on training outcomes, particularly in relation to job placements and retention,” he said.
In addition, FMM urges that funding frameworks adopt a clear outcome-based approach, ensuring that training resources are channelled to industry-aligned and demand-driven programmes that deliver measurable employment results rather than merely fulfilling participation targets.
While expanding benefits is a positive move for employees, the long-term sustainability of the EIS Fund must not be compromised.
“Any enhancements must be underpinned by sound actuarial assessment and prudent financial management to avoid placing additional future cost burdens on employers and employees,” he pointed out.
As Malaysian employers already contribute to multiple statutory and social security schemes, FMM stresses that any future consideration of contribution rate adjustments must be approached with utmost caution and only after comprehensive stakeholder consultation, with full consideration of business competitiveness, cost pressures, and SME resilience.
“FMM reiterates that social protection reforms must strike a careful balance between strengthening worker support and preserving Malaysia’s competitiveness and job-creation capacity,” he added.
FMM looks forward to continued engagement with the ministry and PERKESO to ensure that EIS reforms deliver meaningful employment outcomes, uphold the highest standards of governance and fund stewardship and maintain a sustainable model that supports both employees and employers as Malaysia navigates a fast-evolving labour market, he shared.
