Employment Retention Programme Helps Over 337,000 Workers

Nikki Blog
by Nikki Blog
Jun 28, 2020 at 2:02 PM

During the Movement Control Order (MCO), Prime Minister Tan Sri Muhyiddin Yassin launched the RM250 billion Prihatin Rakyat Economic Stimulus Package (Prihatin)  to cushion the negative economic impact of the pandemic.

Under Prihatin, financial assistance was also given to employers through the Employment Retention Programme (ERP), now merged under the Wage Subsidy Programme (WSP).

The quick financial assistance administered by the Social Security Organisation (Socso) provides for employees ordered to take unpaid leave by their employers, who are economically hit by Covid-19.

Until June, 37,566 employers have applied for the ERP including 337,569 workers. Accepted applications will see each employee receiving financial assistance of RM600 a month.

Sim Swee Yong Development and Construction Sdn Bhd director Sim Kiang Chiok, whose company had to close down when the MCO came into force, has applied for the financial assistance.

“All my business activities had to be closed including my showroom and shopfront. Similarly, at our construction site, we had to stop all works and the only staff on duty were a few security workers at the site.

man using laptop
The ERP was introduced as financial assistance for employees who have been instructed to take unpaid leave due to the COVID-19 pandemic.

“It was very frustrating and worrisome when the MCO was extended for three times until it was replaced with the Conditional Movement Control Order (CMCO) on May 4 and then some relaxation was given for works to resume on May 12 in Sarawak,” he said.

Since many sectors were forbidden from operating during the MCO, Sim said his employees had to stay at home and unable to work during the period. “No work was allowed, which means that we cannot conduct sales either. All other firms such as our legal firms that drafted agreements for our company were also closed.

“Even government departments such as the Land and Survey Department were closed so we could not carry out any transfer of land titles and since the stamp duty office was also closed, no agreement could be legalised and recorded officially,” he said.

Though his business encountered challenges during the MCO, Sim expressed his gratitude to the government for launching the economic stimulus packages to protect the well-being of the people and support businesses in Malaysia.

“The ERP, for instance, has given us some relief in helping us in the payroll of some of our staff, but for staff who earn more than RM4,000 per month, it is very burdensome to us as there are no wage subsidies. But at least we don’t have to retrench any staff and the assistance will last till June this year,” he said, adding that nine of his employees benefitted from the programme.

He also welcomed the government’s decision to continue the WSP under the short-term Economic Recovery Plan (Penjana) by three extra months. “The extension of this assistance set at RM600 per worker per month for another three months will also help us in keeping our workforce.

“This means that the WSP is available for six months in total and I hope that it will be enough till our economy can recover from the pandemic, even though all the economic indicators have shown that we might need a longer time to recover,” he said.

Sim believes that the government can keep to the present wage subsidy assistance where higher assistance will be granted to businesses. Those with a workforce of fewer than 75 workers will be presented with a wage subsidy of RM1,200 per month, RM800 for businesses with 75 to 200 employees, and RM600 for businesses with 200 employees and above.


The ERP also helped employers to keep their workforce.

“I would like to commend the government for this inclusive assistance for all companies during this Covid-19 pandemic,” he added.

As Malaysia has now moved from MCO to CMCO and now Recovery Movement Control Order (RMCO), the amount of ERP applications has decreased with economic sectors slowly opening and more employees returning to work.

Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz stated in the eighth Laksana Report that the government has chosen to incorporate the ERP into the WSP, which has now been expanded under Penjana.

From June 15 onwards, the WSP will enable employers to apply for the wage subsidy for their employees who have been put on unpaid leave. The wage subsidies are also intended to help workers in the tourism and other sectors banned from operating during the CMCO.

As of June 19, RM4.89 billion had been approved for RM303,596 employers benefiting more than 2.4 million workers. All ERP applications submitted before June 15 will be processed by Socso accordingly.

Employers who want to apply for assistance are now encouraged to apply for the WSP, which is open for applications until Sept 30. WSP applications for employers issuing unpaid leave will begin on July 1.

Source: Borneo Post

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