FMM Welcomes Govt’s Decision To Remove Penalty Clause In Employment Insurance System Amendment Bill

KUALA LUMPUR, Dec 11 (Bernama) -- The Federation of Malaysian Manufacturing (FMM) welcomed the government’s decision to remove the financial penalty clause from the Employment Insurance System (EIS) Amendment Bill 2025.

In a statement today, FMM expressed its appreciation, particularly to the Ministry of Human Resources, for being responsive to industry concerns.

FMM president Jacob Lee Chor Kok said by removing the penalty clause, the government has demonstrated a constructive, cooperative stance toward employers, aligning with FMM’s view that compliance should be rooted in partnership rather than punitive enforcement.

“This reversal effectively transforms a mandatory job vacancy reporting obligation into a practical mechanism that supports labour market transparency, without jeopardising business viability,” he said. 

He said the federation is encouraged by the government’s readiness to listen to the legitimate concerns raised by employers, concerns that FMM first detailed in its letter to Sim on Nov 27, 2025, and in subsequent press statements.

“Specifically, FMM had highlighted that the originally proposed Section 45F(4), which would have imposed a fine of up to RM10,000 for failure to notify job vacancies or new positions, represented a substantial burden, particularly for employers with high-volume or frequent hiring needs.

“The penalty-based approach also diverged from international practice, where employment-services notifications are typically managed through administrative levers rather than punitive fines,” he added.

Meanwhile, Lee said FMM noted the government’s broader intent behind the amendment bill, which is to augment the social protection and active labour market provisions under the Social Security Organisation (Socso). 

“As the amended EIS framework moves toward implementation, FMM welcomes the removal of financial penalties and supports a shift toward non-punitive, administratively managed compliance consistent with international norms and the practical realities of the Malaysian business environment,” he said. 

-- BERNAMA