Employment Insurance System (Amendment) Act 2026 comes into operation

2 October 2026

The Employment Insurance System (Amendment) Act 2026 (“Amendment Act”) was gazetted on 15 September 2026. Pursuant to P.U.(B) 391/2026, the Amendment Act, except for section 11, came into operation on 1 October 2026. Section 11 will come into operation on 2 January 2027, introducing new provisions on employment services and active labour market programmes under the Employment Insurance System Act 2017 (“Act”).

The key amendments include the following:

  • introducing employment services to be provided by Pertubuhan Keselamatan Sosial (“PERKESO”), including employment brokerage, job matching, job counselling and career advice, with provision for the appointment of licensed private employment agencies as employment agents;
  • requiring employers to notify PERKESO in writing of any job vacancy or new position before hiring an employee and, once the vacancy is filled, within seven days. Failure to comply may result in fines of up to RM1,000 for a first offence, RM3,000 for a second offence and RM5,000 for a third or subsequent offence. These requirements will take effect on 2 January 2027;
  • empowering PERKESO to implement active labour market programmes, schemes, measures or financial assistance as directed by the Government, which will not be funded by the Employment Insurance Fund;
  • introducing a mobility assistance allowance of RM1,000 for eligible insured persons who accept new employment and report for work within 12 months after receiving their last job search allowance or early re-employment allowance;
  • clarifying that employers may recover employees’ contributions only through deductions from wages and are prohibited from recovering their own contributions from employees, while amending the Third Schedule to revise specified percentages and rates, including an increase from 25% to 50%, the daily rate to RM30 and the applicable amount from RM4,000 to RM7,000; and
  • Providing protection against suits and legal proceedings for PERKESO and specified officers and personnel in respect of acts or omissions in the discharge of their duties, subject to exceptions for bad faith and absence of reasonable cause, with the Public Authorities Protection Act 1948 applying to relevant proceedings involving acts or omissions carried out in good faith.