Malaysia Mandates Social Security for Gig Workers
Why this is here: The new law addresses low participation in the previous voluntary scheme, where less than a third of Malaysia’s gig workers were covered for employment injury.
Malaysia now requires social security contributions for gig workers, effective March, through a new Act. Platform companies must integrate their systems with Perkeso to automatically deduct contributions. This replaces the previous voluntary Self-Employment Social Security Scheme, Lindung Kendiri.
Previously, only 26% of Malaysia’s 1.16 million gig workers participated in the voluntary scheme, leaving many vulnerable. The International Labour Organization notes mandatory coverage is more sustainable than voluntary programs, which often attract only high-risk individuals. This change extends social protection to over 25% of Malaysia’s total labor force, comprised of informal workers.
Experts suggest future focus should include unemployment insurance, retirement benefits, and protections for invalidity and family needs. The ILO is currently assessing the impact of the mandatory contribution with Perkeso, while also exploring co-contribution models used in countries like South Korea and Portugal.