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Malaysian law only. Federal and state law, and Syariah law as applied in Malaysia — General information, not legal advice.

Employment Insurance System Act 2017

Akta Sistem Insurans Pekerjaan 2017

This law sets up the Employment Insurance System, which pays benefits such as a job search allowance to insured employees who lose their employment, funded by contributions from employers and employees (ss 18, 34). It applies to all industries with one or more employees, except persons in the First Schedule (s 2).

Employment Insurance System Act 2017 · Act 800
Akta Sistem Insurans Pekerjaan 2017
Applies to: Federal Act — see s 2 (Application) · Official text ↗
Key points
  • Applies to all industries with one or more employees (s 2(1)).
  • Excludes persons described in the First Schedule (s 2(2)).
  • Requires employers to register and insure all employees (s 16(1)).
  • Defines terms such as 'contribution', 'required number of monthly contributions' and 'early re-employment allowance' (s 3)
  • Mandates contributions from both employers and employees (s 18(1)).
  • Sets out conditions for loss of employment and claims for benefits (ss 27–30).
  • Establishes the Appellate Board to resolve disputes and appeals (s 59(1)).

What this law is

The Employment Insurance System Act 2017 (Akta Sistem Insurans Pekerjaan 2017) is numbered Act 800 in the Laws of Malaysia. Where it applies is set out in section 2 (Application).

Its long title, as printed in the official text: An Act to provide for the Employment Insurance System administered by the Social Security Organization to provide certain benefits and a re-employment placement programme for insured persons in the event of loss of employment which will promote active labour market policies, and for matters connected therewith.

Read every section, the amendment history and the official copy on our law library page for this Act.

How the Act is arranged

  • Part I — Preliminary (ss 1–3)
  • Part II — Administration of employment insurance system (ss 4–7)
  • Part III — Committees (ss 8–12)
  • Part IV — Registration and contributions (ss 13–26)
  • Part V — Benefits (ss 27–43)
  • Part VI — Re-employment placement programme (ss 44–45)
  • Part VII — Financial provisions (ss 46–58)
  • Part VIII — Social security appellate board (ss 59–66)
  • Part IX — Employment services officer, enforcement and investigation (ss 67–77)
  • Part X — General (ss 78–90)

Part titles are from the official arrangement of sections.

Time limits in this Act

WhatLimitSection
Employers must register and insure new employeeswithin thirty days from the date the employees enter into employments 16(1)(b)
Insured person must submit application for claim for benefitswithin sixty days from the date he considers that he has lost his employments 28
Insured person must notify Organization of accepted job offerwithin seven days from the date of acceptance of the offers 34(5)

Offences and penalties

OffencePenalty (as written in the Act)Section
Contravening the requirement to register and insure employeesfine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding two years or to boths 16(5)
Being in employment during the job search allowance period or failing to notify the Organization of a job offerfine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding two years or to boths 34(6)
Committing or conspiring to commit fraud or forgery in connection with contributions or benefit claimsfine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding two years or to boths 72

Laws cited on this page

Act 800Employment Insurance System Act 2017
Akta Sistem Insurans Pekerjaan 2017
PDF · PDF (BM) · Official ↗

Each law links to our mirror page: a copy of the official text captured on a known date, its version history, and the official source. Law library →

Key sections

ProvisionWhat it says, in plain words
s 2The Act applies to all industries with at least one employee, but does not apply to persons listed in the First Schedule.
s 3Defines terms used in the Act, such as 'contribution' and the 'early re-employment allowance' — a lump-sum incentive for accepting an offer of employment and starting work.
s 16Requires employers to register and insure all employees, with a deemed registration date if contributions are paid late, and sets a penalty for non-compliance.
s 18States that contributions are payable by both the employer and the employee to the Organization at rates specified in the Second Schedule.
s 27Requires claims for benefits to be submitted to the Organization in the prescribed manner with supporting evidence.
s 28Insured persons must submit a claim for benefits within sixty days from the date they consider they have lost their employment.
s 30Defines 'loss of employment' as termination or voiding of the contract for reasons other than voluntary resignation, expiry, mutual consent without terms, completion of work, retirement, or misconduct.
s 34Entitles approved claimants to a job search allowance, prohibits employment during this period, and requires notification to the Organization within seven days if a job offer is accepted.
s 41Allows the Organization to suspend benefits if there is reasonable ground to believe in false claims, employment during the allowance period, or contravention of the Act, subject to an inquiry.
s 59Grants the Appellate Board power to decide disputes regarding employee status, contributions, loss of employment, benefit entitlements, and other matters under the Act.
s 60Proceedings before the Appellate Board must be instituted in the area where the insured person was working, with the Chairman able to transfer matters to another area.
s 72Makes fraud or forgery in connection with contributions or benefit claims an offence punishable by fine or imprisonment.

Worked examples

Example 1: Late Registration Penalty

Facts. Ahmad hires a new worker, Siti, but forgets to register her with the Social Security Organization for two months.

The law. Employers must register employees within thirty days of them entering employment (s 16(1)(b)). Failure to do so is an offence (s 16(5)).

Outcome. Ahmad commits an offence and is liable to a fine not exceeding ten thousand ringgit or imprisonment for up to two years (s 16(5)).

Example 2: Claiming Benefits After Resignation

Facts. Rina resigns from her job because she wants to travel. She then applies for the job search allowance.

The law. Loss of employment does not occur if the contract is terminated by voluntary resignation (s 30(1)(a)).

Outcome. Rina is not entitled to benefits because her resignation is considered voluntary and not a loss of employment under the Act (s 30(1)).

Example 3: Finding a Job While on Allowance

Facts. Kamal is receiving the job search allowance. He accepts a new job offer on Monday but does not tell the Organization until the following Friday.

The law. An insured person must notify the Organization within seven days from the date of acceptance of a job offer (s 34(5)).

Outcome. Kamal has complied with the law as he notified the Organization within the seven-day limit (s 34(5)).

Examples are simplified illustrations with invented names; real cases turn on their own facts.

Questions & answers

Who is covered by this Act?

The Act applies to all industries that have one or more employees (s 2(1)). It does not apply to persons described in the First Schedule (s 2(2)).

What counts as 'loss of employment'?

Loss of employment occurs if the contract is terminated or becomes void for reasons other than voluntary resignation, expiry of contract, mutual consent without terms, completion of work, retirement, or misconduct (s 30(1)).

How long do I have to claim benefits after losing my job?

You must submit an application for claim for benefits within sixty days from the date you consider that you have lost your employment (s 28).

Can I work while receiving the job search allowance?

No, an insured person shall not be in any employment during the period of receiving the job search allowance (s 34(4)). If you accept a job offer, you must notify the Organization within seven days (s 34(5)).

Who decides if I am entitled to benefits?

The Organization decides on claims, but the Appellate Board has the power to decide disputes and appeals regarding entitlement to benefits (s 59(1)(h)).

What happens if I provide false information in my claim?

The Organization may suspend your benefits if there is reasonable ground to believe you furnished false particulars (s 41(1)(a)). Committing fraud or forgery in connection with claims is an offence punishable by fine or imprisonment (s 72).

All questions & answers → · Ask your own →

This page explains the general position in Malaysia (last reviewed October 2026). It is not legal advice — check the current law and get advice on your own facts.

Sources

Employment law: your rights at workEmployees' Social Security Act 1969Employment Act 1955Industrial Relations Act 1967

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