THE Covid-19 pandemic has disrupted every facet of our lives at a profound level. What began as a health crisis evolved into a multipronged conundrum on the economic and social fronts, pushing our primal instincts to adapt to a new normal.

       Globally, we are all fighting an invisible war with the acute focus to save lives and livelihood. Our labour market is not immune to the global economic volatility.

       Inevitably, implementation of strict SOPs aimed to mitigate the health crisis has slowed down business activities, and ultimately the labour market. Hence, employees who have lost their jobs found it even more difficult to find suitable employment due to lack of opportunity.

       History has proven that in times of crisis, there will be a surge in unemployment and loss of employment (LOE). Traditionally, as businesses transform and adapt to structural or cyclical changes, LOE usually hovers around 40,000 and this will then translate into the natural rate of unemployment at about 3.3%.

       The direct impact from retrenchment is regressive as the employment losses would affect the low-wage earners more than high-wage earners.

       Since two-thirds of total household incomes in Malaysia are from the labour market, their livelihood would be severely affected by the pandemic. This calls for immediate and appropriate assistance; efforts to improve the income inequality and socio-economic of everyday Malaysians must be centred on the labour market interventions.

       In this context, the Government had taken a significant move by introducing the Employment Insurance System (EIS) in January 2018.

       The EIS, being managed and administered by the Social Security Organisation (Socso) under the Employment Insurance System Act 2017 (Act 800), has been instrumental in cushioning the livelihood of affected workers. Under the EIS, workers who meet the conditions under Act 800 are entitled to the financial assistance through the period of unemployment.

       Act 800 stipulates that insured persons who lost their jobs may receive a job search allowance (JSA) between three and six months to support partially the income loss. The Government provides additional funds under SIP Prihatin to extend the JSA for an additional three months with a reduced rate of 30% a month. If the affected workers manage to find a new job while receiving JSA, they are also entitled to an early reemployment allowance (ERA).

       The primary motivation is to protect workers against employment shocks and job losses. Through the EIS, almost 200,000 Malaysian workers have been rescued from total income loss and inadvertently falling into poverty.

       The crux of the agenda remains protecting the economic welfare of low-income groups. The role of EIS has become even more prominent at the height of the pandemic crisis where the number of reported LOEs increased exponentially.

       To further stabilise the market, the EIS also promotes employability through training and reskilling – potentially facilitating their transition and enhancing the productivity of the workers.

       As a unique function of employment insurance, the programme mandates that those receiving employment insurance benefits must be able and willing to seek, train and accept offers via Socso’s ecosystem – a complete 360 employment assistance and services to workers.

       Through Socso’s ecosystem, from January 2020 until August 2021, Socso has paid RM628mil monetary assistance (excluding reskilling programme) to workers who lost their jobs and disbursed more than RM17bil to implement wage subsidies for employers to retain their local workers.

       More than 335,000 employers and 2.84 million workers have also benefited from the wage subsidies programme.

       The Government has also disbursed an additional RM1.2bil for the implementation of hiring incentives under Pemulih to encourage employers to hire unemployed, insured persons who lost their jobs as well as vulnerable groups.

       The monies disbursed via EIS also serves as a multiplier effect for the economy by maintaining consumption level and help businesses to sustain during this challenging time.

       The Covid-19 pandemic has definitely exposed the cracks in the system and landed heavy blows on the Malaysian economy. Through the period, unemployment has increased from an average rate of 3.3% in 2019 to 4.5% in 2020, inducing an additional 202.8 thousand unemployed people.

       EIS plays a vital role in bridging job seekers opportunities. In June 2020, the Government similarly mandated Socso via EIS to administer the national employment portal, MYFutureJobs.

       In real-time to date, MYFutureJobs has 672,411 active job seekers and, between 180,000 and 200,000 active job vacancies. Coupled with an extensive hands-on approach, EIS has managed to place 370,380 job seekers in employment since 2020.

       Through the implementation of various active labour market programmes, the EIS has holistically helped thousands of workers especially locals during the pandemic. Hence, this is an impetus to expand the coverage and functions of employment insurance in Malaysia.

       One of the critical lessons learnt from the pandemic crisis is to expand the employment insurance inclusively to all workers including self-employed, and in the gig economy. A pilot programme, SIP Prihatin 2.0 is now in implementation under the Pemulih package to provide job seeking allowances to non-registered and unemployed jobseekers.

       Additional areas for the improvement and reform of the Employment Insurance System in Malaysia is currently under review by the Human Resources Ministry and Socso. In anticipating the future labour market condition that is dynamic and highly dependent on a volatile economy, Socso is taking progressive and proactive efforts to further improve the state of social protection as we stand in solidarity with all workers in Malaysia.

       Datuk Seri Dr Mohammed Azman Aziz Mohammed is Chief Executive, Social Security Organisation (Socso), Malaysia