THE Employment Insurance System (EIS) bill, which will benefit 6.5 million private sector employees, has been tabled for first reading in the Dewan Rakyat.

The scheme, mooted by Prime Minister Najib Razak, requires both employers and employees to contribute to the system on a monthly basis, based on a contribution scale outlined in the bill.

One of its provisions seeks to prohibit employers from reducing the wages of employees, or discontinuing or reducing benefits payable to employees under the conditions of service solely by reason of their liability for any contributions payable under the proposed act.

Employers found guilty of violating the rule could be fined up to RM10,000 or jailed up to two years or both.

The bill also protects those who are made redundant by their companies, allowing them to submit an application to claim benefits within 60 days of the date they lost employment.

It states that loss of employment occurs when the contract of service of an insured person, or employee, is terminated or becomes invalid.

It does not cover voluntary resignation by the insured person; the expiry of the contract of service of the insured person; the termination of the contract of service by mutual consent; the completion of the work in accordance with the terms of the contract of service; the retirement of the insured person; and, the termination of the contract of service of the insured person due to misconduct.

What is claimable includes a job search allowance, re-employment allowance and training allowance.

The bill was tabled by Human Resources Minister Richard Riot, and the system will be managed by the Social Security Organisation.

It will come into force on January 1 next year. – August 1, 2017.