Everything You Need to Know About Wage Subsidy Program (WSP) And Employment Retention Program (ERP)
Wage Subsidy Program is to provide help to employers to retain their employees and prevent the loss of jobs and living under the guidance of LHDN Malaysia.
Here are answers to some most obvious questions related to Wage Subsidy Program and other taxation services in Malaysia.
What is the start effective and the last application date of WSP?
- From 1st April 2020 WSP start effective.
- From 1st April 2020 WSP cover for 3 months effective or from the month it is applied.
- 15 September 2020 is the last day of application for WSP.
Few Important Features of WSP
Non-qualifieds for WSP
- Any employer or company who register or commence operation on or from date 1 January 2020
- Any employer or employee who has not yet register or contribute with PERKESO
- Any Employee who receives Employment Retention Program for the same month.
- Any employee with a salary more than RM4,000
- Any employee has been fired
- Any government servant
- Any freelancer
- Any foreign worker and migrant
What documents are required for WSP?
- List of employee names
- Bank account number ( for that attach 1st page of bank statement)
- Business Registration Number (BRN). BRN is the Company Number. Example: 1234560-X
- Form 9 or Section 13 (CA 2016) or any other SSM Registration Cert
- Declaration PSU 50 Form; and
- *Other supporting documents- Statement of Profit and Loss, Revenue Report and likewise. The documents must be verified by management.
Does the employer have to make a monthly claim for the wage subsidy payment?
- No need for a monthly claim. For the successive month, the employer only needs to update if there are any changes in the employee listing and business status before next month’s wage subsidy is paid out. For the employer/company with no changes, the wage subsidy will be automatically paid.
- Successive month’s WSP will be paid based on the updated listing.
- SOCSO will inquire in case of inaccurate information or variance with information in Portal Assist.
Can an employer operating before 1st January 2020 but not registered with EIS apply for WSP?
- No, the employer must be registered or must have made any contribution with PERKESO before 1st April 2020;
- Must be registered with SSM or PBT or Pihak Berkuasa Tempatan, Pihak Berkuasa Perkhidmatan Professional, Saintifik or Teknikal before 1 January 2020
- At least 1 employee
Can an employer registered to SOCSO prior-to-1 April 2020 with new Non-SOSCO registered employees working since 1 February 2020, apply for WSP?
Yes, they can. The employee must be in work with the employer before 1 April 2020 and the employer must register the employee with SOCSO before the application of WSP.
Can an employer already have applied for ERP, can also apply for WSP now?
Yes, if the employer fulfills the terms and conditions for the Wage Subsidy as per Table 1.
Can the employer re-apply for the latest announced Wage Subsidy ( 6 April 2020) if the employer already applied for the 27 March 2020 announced Wage Subsidy
For the employer who had applied for the 27 March 2020 announced Wage Subsidy with more than 100 employees. The employer can make new applications with up to 200 employees and must fulfill the terms and conditions as per Table 1.
Can the employer apply for Wage Subsidy Program (WSP) and Employment Retention Program (ERP) for the same employee at the same time?
No, the employer cannot apply the Wage Subsidy and ERP for the same employee at the same time. But, the employer is allowed to apply the Wage Subsidy and ERP for different employees at the same time with terms and conditions as per Table 1.
How a company can determine the 50% decrease in sales to qualify for the Wage Subsidy?
The employer needs to compare the total sales or revenue of January 2020 with that of February 2020 or March 2020, if it was reduced to 50% and above. Such an employer is qualified for the Wage Subsidy.
Can a company with various Departments/ Units/ Teams choose a part of the employees from these various units?
Yes, the employer can choose any part of the employees if they fulfill terms and conditions as per Table 1.
If the employer submits the application for Wage Subsidy in Jun 2020, will they get wage subsidy starting from April?
No back payments will be made.
According to the criteria, the employer must maintain the staff for 6 months. If the employee resigns on their own and the employer is receiving the Wage Subsidy, to reflect the changes does the employer need to apply again?
When a staff willingly resigns during the 3 months of the subsidy period, the employer just needs to update the employee information. If the employer fails to do so, it will be subject to legal action under the Law.
How to know the Wage Subsidy application has been approved or not?
- Employers will get a Reference Number once an application submitted and can be used to check in the Portal.
- Approval status will be emailed.
- The approved listing of employers will be listed on the PERKESO website including the number of the staff approved.
What can the employee do if their employer receives WSP but decides not to pay or cut salary or ask the employee to take unpaid leaves or terminate employees?
- Firstly check the approved employer under the WSP at https://www.perkeso.gov.my/index.php/en/wage-subsidy-programme
- The employee can file a complaint to SOCSO at email@example.com.
- Non-WSP issues also can refer to Department of Labor (Jabatan Tenaga Kerja) via hotline 03-8890 3404 or 03-8886 2409 or by emailing to firstname.lastname@example.org
Definition of Wages or Salary of RM4,000 and below under the WSP terms?
Follows the salary definition under the Akta Keselamatan Sosial Pekerja 1969 [Akta 4]. That includes overtime, commission, paid leave, incentivized allowances, service charges and etc.
How to pay employees upon joining the WSP?
Employers must pay their salaries as usual and then submit their Wage Subsidy Program application to SOCSO. The SOCSO subsidy is financial assistance to the employer. SOCSO and EIS contribution payments are compulsory as per the employee’s actual salary.
If an employee works for two different companies and both contribute to EIS, does both companies qualify to apply for WSP?
Yes, both the companies can apply Wage Subsidy for the same employee as long as they fulfill the terms and conditions as per Table 1.
If a company has Malaysian as well as non-citizen employees who haven’t registered with PERKESO. Can the employer apply for the Wage Subsidy Program on behalf of employees of Malaysian citizens only by registering with PERKESO?
Before applying for the Wage Subsidy Program the employer must register or contribute with PERKESO. Only Malaysian citizens are eligible for this application. The employer must also mention the total number of Malaysian citizen and non-citizen employee**