EIS Malaysia: Retrenched Workers May Qualify for Benefits Amid RM2,000 Minimum Wage Hike

Workers who lose their jobs due to company restructuring following Malaysia’s planned minimum wage increase to RM2,000 may qualify for benefits under the Employment Insurance System (EIS), according to Economy Minister Akmal Nasrullah Mohd Nasir.

The benefits include a Job Search Allowance for up to six months, providing temporary financial support to eligible workers while they look for new employment.

Akmal Nasrullah Mohd Nasir shared the information in the Dewan Rakyat on October 13, 2026, in response to questions about how the minimum wage increase could affect employment, prices and business operating costs.

Malaysia's Minimum Wage to Increase From RM1,700 to RM2,000

Under Budget 2027, Malaysia's minimum wage is set to increase from RM1,700 to RM2,000 starting in June 2027. The change is expected to benefit more than four million workers.

To help ease the adjustment for micro, small and medium enterprises (MSMEs), businesses with annual sales below RM50 million will be exempted from the new minimum wage requirement.

According to Akmal Nasrullah Mohd Nasir, the exemption aims to help eligible businesses maintain their operations without resorting to drastic measures, including retrenching workers.

The new minimum wage order will be enforced by labour departments in Peninsular Malaysia, Sabah and Sarawak under the National Wages Consultative Council Act.

Workers can also lodge complaints if employers fail to comply with the new minimum wage order. Akmal Nasrullah Mohd Nasir said employers who breach the law could face legal action.

How Long Can Retrenched Workers Receive EIS Benefits?

Eligible workers may receive the Job Search Allowance (JSA) for between three and six months, depending on their contribution records.

According to the Social Security Organisation (PERKESO), applicants must apply within 60 days from the date of job loss and meet the required Contribution Qualifying Conditions. Their job loss must also fall within the categories recognised under the EIS Act.

These categories include normal retrenchment, voluntary or mutual separation schemes, business closure and certain cases of constructive dismissal. Other qualifying circumstances may apply under PERKESO's rules.

EIS coverage depends on the worker's employment status, applicable eligibility rules and contribution history. Workers should check their individual circumstances with PERKESO rather than assume that every type of job separation automatically qualifies.

Eligible applicants can receive re-employment assistance through PERKESO's Employment Services Officers. They are also required to register with MYFutureJobs as part of their job-search activities. Eligible recipients may also access skills training under the EIS programme.

Workers can refer to PERKESO's official Employment Insurance page for the latest eligibility requirements and benefits.

Government Allocates Funds to Help Control Prices

The government is also stepping up efforts to keep essential goods affordable amid concerns about potential price increases following the minimum wage adjustment.

For 2027, the government has allocated RM700 million for 30,000 Jualan Rahmah Madani programmes and RM50 million for 5,000 Jualan Agro Madani programmes.

These initiatives aim to help stabilise prices and make essential goods more affordable for the public.

The government will also strengthen enforcement under the Price Control and Anti-Profiteering Act to address concerns about price increases.

Government Highlights Wage Progression and Productivity

Akmal Nasrullah Mohd Nasir said wage increases should be accompanied by improvements in worker productivity, including better skills, technology adoption and continuous training.

He also acknowledged concerns about wage compression, which occurs when minimum wage increases are not matched by proportionate salary increases for workers with higher skills or qualifications.

The government is considering ways to improve wage progression, including a commitment by government-linked investment companies (GLICs) and government-linked companies (GLCs) to raise their living-wage benchmark from RM3,100 to RM3,400 per month next year.

Akmal Nasrullah Mohd Nasir also reported that nearly 51,000 workers had benefited from the Progressive Wage Policy (PWP), exceeding its initial target of 50,000. More than 4,000 employers had participated in the programme.

The programme is scheduled to run until 2027, with the government reviewing its effectiveness.

The government aims to increase the employee compensation share of the economy from approximately 33.9% to 40% by 2030.

FAQs

What is the Employment Insurance System (EIS) in Malaysia?

The Employment Insurance System (EIS) is administered by PERKESO to provide income replacement and re-employment assistance to eligible insured workers who lose their jobs.

Can workers retrenched after the minimum wage increase receive EIS benefits?

They may qualify if their job loss meets EIS requirements and they satisfy the relevant contribution conditions. Eligibility is assessed under PERKESO's rules.

How long can workers receive the EIS Job Search Allowance?

Eligible recipients may receive the Job Search Allowance for three to six months, depending on their Contribution Qualifying Conditions.

When will Malaysia's minimum wage increase to RM2,000?

Under Budget 2027, the revised minimum wage is scheduled to take effect in June 2027, subject to the applicable order and implementation requirements.

Where can workers check their EIS eligibility?

Workers can refer to PERKESO's official Employment Insurance page for eligibility requirements, benefits and application information: https://perkeso.gov.my/en/our-services/protection/employment-insurance.html

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