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Employers to Claim Subsidized Wages (Subsidi Upah)

Updated: Jan 11, 2021

The Wages Subsidy Program (Program Subsidi Upah), which is an extension of the Employee Retention Program (ERP) , has been widely misunderstood to be an 'additional wages for Employees' but it is not. This program is a relief for employers in private sectors who have suffered decrease of 50% income in the business since 1.1.2020.

Starting from April 1,2020, the affected employers may claim subsidy of RM600 a month (for up to 3 months only) for each employee with a monthly income of RM4,000 and below, provided that the employee is contributing to the EIS. The Application should be made by eligible employers and not the employees in

PERKESO will pay the subsidy to the employer and the employer shall ensure that the money is credited to employee's account within 7 days from the date that the subsidy is received.

However, employers must take note that after receiving the Wages Subsidy, during that 3 months period, employers are not allowed to:-

i. dismiss the employee;

ii. forced employee to be on unpaid leave and that employee be entitled to the RM600 financial relief under the initial ERP ; and/or

iii.deduct the employee's salary.

There is a controversy whether such subsidy is of any assistance to employers who faced a decrease of 50% in business income. However, one should not look into this narrow perspective only. The Program Subsidi Upah is to be seen as an additional assistance to relieve employers from the hiccups for 3 months especially for businesses that have large numbers of non-managerial or non-executive levels such as restaurant chains in which the eligible employees are usually more than 50% of the total company workforce.

In the event, if such business is not able to survive, even with the subsidy, then the business may opt to put employees under unpaid leave after the MCO period. To know more about how you can put employees on unpaid leave, click here.



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