• COVID 19: The Employment Retention Programme
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COVID 19: The Employment Retention Programme

14 April 2020

The Covid-19 pandemic has had an unprecedented effect on virtually all sectors of the economy.  Many businesses struggle to ensure the safety of their business and customers and many have had to make the hard choice of requesting that their employees take unpaid leave. To this end, the government has taken steps to help companies and their employees weather this storm together.

The Employment Retention Programme (“ERP”) is an initiative to provide financial assistance to employees who have mutually agreed with their employers to take unpaid leave as a result of COVID-19. This Programme is effective 1 March 2020 and will run until a date to be determined by the Government.

 

The conditions in applying for the ERP and the application process are outlined as follows:

Description

Employment Retention Program

Amount

RM600 per employee per month

Who is payment made to?

Payment is made to qualifying employees

Conditions for application

The incentive may only be claimed for the following employees:

a. Employees in private sector (i.e. including temporary employees);

b. Employee is registered with and contributing to Employment Insurance System (“EIS”);

c. Employees who earn a monthly wage of RM4,000 and below; and

d. Employees who are served with Notice of Unpaid Leave of at least 30 days (i.e. from 1 March 2020) for a period of between 1 to 6 months.

Incentive period

Between 1 to 6 months (based on the Notice of Unpaid Leave)

Application method

Apply through Form ERPC-19

Supporting documents

a. Form ERPC-19;

b. Copy of the employer’s bank account statement;

c. The Company registration number; and

d. The Notice of Unpaid Leave provided to the employee.

Effective date

1 March 2020

How to apply

Application may be made through [email protected] from 20 March 2020 onwards.

Payment method

The ERP payment will be made through employers, who are required to debit the amount into the employees’ account within seven (7) days upon receiving payment from SOCSO.

 

Frequently Asked Questions (“FAQs”)

1. Which category of employees are not eligible for ERP?

a) Employees who are not registered with or contributing to EIS;
b) Employees who have been dismissed;
c) Employees in the public sector;
d) Those self-employed including freelancers; and
e) Foreign workers and expatriates.

2. How is monthly salary defined?

The interpretation of wage under the Employees’ Social Security Act 1969 will apply.This includes all remuneration payable in money by an employer to an employee including gross salary, overtime, commission, paid leave, extra work on holidays, incentive allowances and service charges.

3. How is the incentive calculated?

If an employer issued a Notice of Unpaid Leave to its employee effective from 1 March 2020 to 30 June 2020, this means that the employee is eligible to claim for incentive up to 4 months (i.e. 4 x RM600 = RM2,400).

4. Is there a limit set on the number of applications that may be made by an employer?

No, there is no limit to the number of applications made.

5. What is the difference between the ERP and the Wage Subsidy Programme (“WSP”)

The ERP is aimed at providing immediate financial assistance to employees who have mutually agreed with their employers to go on unpaid leave whereas the WSP is aimed at providing a wage subsidy to employers to continue with their operations and retain their employees.

6. Can an employer apply for ERP and the WSP at the same time?

Yes, the applications may be made at the same time. However the application for ERP and WSP cannot be done for the same employee.
 


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