STRICT PENALTIES FOR PLATFORM COMPANIES SKIPPING GIG WORKER CONTRIBUTIONS

KUALA LUMPUR, Dec 1 (Bernama) -- Platform companies that fail or refuse to pay the mandatory 10 percent social protection contribution for gig workers will face strict penalties, including fines of up to RM50,000 or a maximum prison sentence of two years.

Deputy Minister of Human Resources Datuk Seri Abdul Rahman Mohamad said these penalties are stipulated under Clause 108 of the Self-Employment Social Security Act 2017 (Act 789) to ensure the protection of all gig workers. 

"Upon conviction, the implicated individual may be sentenced to imprisonment of up to two years, a fine not exceeding RM50,000, or both," he said during an oral question and answer session in the Dewan Negara today.

He was responding to a question from Senator Tuan Che Alias Hamid, who sought clarification on the penalties or actions imposed on platform companies that fail to fulfil their responsibility of paying the government-mandated 10 percent social security contribution for gig workers.

Meanwhile, responding to a question from Senator Datuk Ahmad Ibrahim regarding the total number of compound fines issued against companies that default on contributions to the Social Security Organisation (Perkeso) and the Employees Provident Fund (EPF), the Deputy Minister reported that, as of October, 4,564 prosecutions have been initiated for various employer-related offences.

"Of that total, 1,276 cases, or 27.95 percent, involve offences by employers who failed to contribute to Perkeso, with arrears amounting to RM31.14 million.

"The government is not issuing compound notices to defaulting companies. We are taking strict action directly through prosecution in court," he added.

-- BERNAMA