Malaysia Mandates Social Security for Gig Workers
Why this is here: The article details how Malaysia’s shift to mandatory social security contributions for gig workers addresses the problem of low enrollment in voluntary schemes, as those at highest risk were most likely to sign up.
Malaysia will require gig workers to contribute to social security covering work-related injuries and illnesses starting in March. Platform companies must connect their systems to the Social Security Organization (Perkeso) for automatic deductions.
Previously, safety net coverage for these workers was voluntary. Only 26% of Malaysia’s 1.16 million gig workers participated in the previous voluntary scheme, Lindung Kendiri. The new law aims to expand social protection to the country’s growing informal workforce, which represents over 25% of the total labor force.
The International Labour Organization (ILO) notes mandatory contributions are crucial. Voluntary schemes often have low participation rates as higher-risk individuals are more likely to enroll, impacting sustainability. This change will protect delivery drivers—many young families—who face work-related risks.
Further gaps remain in comprehensive social protection, including unemployment insurance and retirement benefits. Future focus may involve expanding existing protections or introducing new ones.