Malaysia expands scope of Self-Employment Social Security Act 2017 from 1 October 2021

27 October 2021

The following legislative developments under the Self-Employment Social Security Act 2017 (“Act”) were gazetted on 21 September 2021 and came into operation on 1 October 2021:

  • Self-Employment Social Security (Amendment of First Schedule) Order 2021
  •  Self-Employment Social Security (Rates of Contribution for Person Carrying Out Service of Carriage and Delivery of Goods or Food) Regulations 2021
  •  Self-Employment Social Security ( Amendment) (No. 2) Regulations 2021

Self-Employment Social Security (Amendment of First Schedule) Order 2021 (“Amendment Order”)

The Amendment Order expands the scope of self-employed activity under the Act to include any activity in relation to the service of carriage and delivery of goods or food by any person:

  • by means of any motor vehicle or any other conveyance owned by him, or managed, maintained or operated by that person, in any form of arrangement with the owner or lessor of the motor vehicle or other conveyance, or without using any motor vehicle or other conveyance; and
  •  whether for hire or reward or for any other valuable consideration or money’s worth or otherwise,

(“Goods or Food Delivery”). Based on the Amendment Order and section 11(1) of the Act, citizens or permanent residents in Malaysia that engage in Goods or Food Delivery (“Delivery Gig Workers”) are now required to register with and pay contribution to the Social Security Organisation (“SOCSO”) in the manner prescribed under the Act.

Self-Employment Social Security (Rates of Contribution for Person Carrying Out Service of Carriage and Delivery of Goods or Food) Regulations 2021 (“Rates Regulations”)

The Rates Regulations provide that:

  • every Delivery Gig Worker is required to pay a contribution to SOCSO or any self-employment social security agent at the rates based on the selected insured monthly earning (i.e. the class of earnings as shown to be selected by a Delivery Gig Worker for the purpose of payment of contribution) as specified in the Schedule of the Rates Regulations;
  • the coverage period for the rates of contribution selected by the Delivery Gig Worker will be for a period of 12 consecutive months;
  • the selected insured monthly earning varies from RM1,050 to RM3,950; and
  • the rates of contribution, based on the selected insured monthly earning, vary from RM157.20 to RM592.80 per month.

Self-Employment Social Security (Amendment) (No. 2) Regulations 2021 (“Amendment Regulations”)

The Amendment Regulations provide that the Rates Regulations are added to the First Schedule of the Self-Employment Social Security Regulations 2018.