Kuala Lumpur, November 5, 2025 — The Federation of Malaysian Manufacturing
(FMM) welcomes the tabling of the Employment Insurance System (Amendment) Bill
2025 by the Honourable Minister of Human Resources for first reading in Parliament on
November 4, 2025. 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.
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.
Accordingly, 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.
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.
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 Supports Enhancement of EIS Benefits, Emphasises Need to Ensure Long-Term Fund
Sustainability
FMM reiterates that social protection reforms must strike a careful balance between
strengthening worker support and preserving Malaysia’s competitiveness and jobcreation
capacity.
FMM looks forward to continued engagement with the Ministry of Human Resources 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 fastevolving
labour market.
