KUALA LUMPUR: Employers have been given a grace period from Thursday (May 21) to June 22 to register and contribute voluntarily to the Social Security Organisation (PERKESO).
Afterwards, errant employers will be liable to compounds, court action or be imposed the Late Contribution Benefit (FCLB), said its chief executive officer Datuk Seri Dr Mohammed Azman Aziz Mohammed.
He noted to the media that there were 238,060 non-compliant employers as of April 2026, comprising 26% of the 915,616 registered and active employers, with 74% (677,556) contributing for their employees.
Dr Mohammed Azman added that the past 17 years of Ops Kesan found that the rate of non-compliant employers hovered between 19% and 21%, or one in five employers.
“I will not say the numbers are serious, but it is still quite high because there are still employees who didn’t comply even though Perkeso contributions are mandatory under provisions of the Employees' Social Security Act 1969 (Act 4),” he said on Thursday.
Among the non-compliant employers, Dr Mohammed Azman said they were mostly small to medium enterprises in the service and food and beverage industries.
Reasons cited for non-compliance ranged from being unaware or uncertain of the law making contributions mandatory and cutting costs. He stressed that these reasons were not acceptable due to the affordable nature of contributions and how long the law has been in place.
Compounds for non-compliance peaked in 2025 with 5,009 compounds amounting to RM3.58mil while 4,394 employers were charged in court.
From 2019 to Thursday, 495,380 foreign workers were registered under the body but with no contributions, involving five localities in Selangor at 37%, followed by Kuala Lumpur (22%), Johor (10%), Sarawak (6%) and Penang (4%).
The construction sector is the highest for non-compliance at 21.4%, followed by manufacturing (20.9%); other services (12.6%); Agriculture, Forestry and Fisheries (9.1%) and Retail (5.3%). Other services include the maintenance sector for household goods, vehicles, musical instruments, and sports among others.
Dr Mohammed Azman added that this year PERKESO will focus enforcement on two new sectors, namely hawkers and gig workers, in line with the government’s gazettement of the Gig Workers Act 2025 (Act 872).
“Our approach, however, is a ‘soft landing’ after taking into account the constraints of the current economic environment driven by global uncertainties,” he said.
He added that a total of 892,000 gig workers have been registered since Act 872 was enforced, beginning March 31, with e-hailing and p-hailing in the majority (70 to 80%).
For the period 2020 to 2025, a total of 19,190 compound notices were issued, involving a total value of RM11.9mil, while 17,686 cases were prosecuted under the Workers Protection (Act 4) and Rate of Contribution Employment Insurance System (Act 800).
Failure to comply with the obligation to register is an offence and can be subject to a compound of up to RM5,000 depending on the type of offence committed.
FCLB rate of 6% per annum can also be imposed on employers, in addition to facing court action, which can lead to a fine of up to RM10,000 or imprisonment of up to two years, or both.
