employment law (hrm 657)
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EMPLOYMENT LAW (HRM 657)/5C
JULY-NOV 2010
GROUP ASSIGNMENT
[GROUP 1]
TOPIC 1: SOCIAL SECURITY PROTECTION
UNDER THE EMPLOYEES PROVIDENT
FUNDACT 1991
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The purpose of the law
The main objective is to provide financial reliefor social security protection for workersthrough compulsory savings.
To provide financial security for its membersretirement purposes.
To preserving and growing the saving of its
members in a prudent manner. With the best practices ininvestment and
corporate conduct.
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The employees under the scope of the
law Section 70 and the Third Schedule to the Act
further reinforced this by providing that some
of the provisions in the Act apply only to
Malaysian citizens.
employees upon attaining 55 years of age (50
years in the case of female workers) or in the
event of total incapacity.
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Employers legal obligations under the law
Employer's Registration Certificate
Contributions Remittance
Statement
Notify any change Of
Name/Employer Status
Cessation Of Liability and
Subsequent Re-employment of
Employees
Contact The EPF Regarding Any
Problems On Contributions
Immediate Response To Any
Enquiry Form The EPF
Termination Of Employee and Not
Liable To Contribute Temporarily
Notify any change Of Address
Payment of EPF Contributions
Wage Book/Register Statement of Wages
Registration Of Employees As EPFMembers
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Employer's Registration Certificate
required to exhibit the certificate at all times
at the employer's premise so that it can be
seen by all employees.
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Registration Of Employees As EPF Members
An employer must register all of his/her employees, who have not been
registered with the EPF, within 7 days from the date of employment
by completing Form EPF 3 before the first contribution is made.
The employee is required to give his/her personal details and forward his Identity
Card/Passport to the employer. The employer is responsible to complete the Form
EPF 3 and forward it to EPF.
If the employee is already registered with EPF, the EPF membership number
must be obtained from the Member or from any EPF office.
The EPF membership number allocated to each employee should be used when
remitting the employee's EPF contributions or in any other dealings with the EPF,
where relevant.
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Wage Book/Register An employer is required to keep the wage book/register and EPF records which
contain details of the employees as listed below for a minimum of six years fromthe date the last information was recorded.
Details that should be in the Wage Book/Register are as follows:
a. Full name of employees
b. EPF membership number
c. Sex
d. Date of birth
e. Number and colour of the identity card (for employees who are foreigners, it
is suggested that the passport number and the citizenship be stated)
f. Permanent residential address
g. Occupation
h. Date of employment
i. Period of payment of wages (e.g: daily/weekly/monthly)
j. Wages for the said period
k. Other payments made for the said period
l. The amount deducted for EPF contributions
m. The amount paid by the employer for EPF contributions
* The Wage Book/Register should be produced to the EPF Inspector when requested for
inspection.
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Statement of Wages
An employer is required to issue a statement of wages to every employee. This
statement must contain the employee's particulars as follows:
a. Full name of the employee
b. EPF membership number
c. Sexd. Identity Card number and colour (for foreigners, it is suggested that the
passport and citizenship numbers be stated)
e. Period of payment of wages (e.g:daily/weekly/monthly)
f. Total wages for the said period
g. Other payments made for the said period
h. Amount deducted for EPF contributionsi. Employer's reference number
j. Amount paid as the employer's share of contributions: and
k. Full name of the employer/employer's representative, signature and
date of statement issued
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Payment of EPF Contributions
An employer should deduct only the employee's share of the EPF contributionfrom the employee's wages. The employer is also required to contribute his/her
share of the contributions together with the employee's portion to EPF according
to the Third Schedule of the EPF Act 1991.
An employer should complete the monthly contribution schedule (Form EPF 6
(Form A) with the correct and full details of the employees. The name of theemployee must be the same as in the Identity Card and Membership Certificate (if
any).
The employer is required to pay contributions on any wages of a month on or
before the 15 of the following month. The total payment must tally with the total
contributions recorded in the Form EPF 6 (Form A).
The employer is required to check the validity of all receipts received from EPF
and notify EPF if there are any errors. The receipts should be kept for six years
for inspection by EPF officers.
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REMINDER:
Any employer who fails to contribute for his/her workers can be convicted under
the following sections:
Section 43 (2)
Offence : Any employer who fails to contribute to the EPF Board on behalf of any
employee in respect of any month within 15 days of the contribution month due
has committed an offence and if convicted can be jailed up to three years or finedup to RM10,000 or both.
Section 48 (3)
Offence : Any employer who deducts an employee's contributions from the
employee's wages and then fails to remit the said deductions or any part thereof
to the EPF has committed an offence and if convicted can be jailed up to six yearsand fined up to RM20,000 or both.
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Contributions Remittance
Statement The EPF will issue the Contributions Remittance Statement to employers
after
processing Form EPF 6 (Form A) every month. The employer must ensure
that
the particulars of contributions printed on the Statement are correct.
If there are any mistakes in the particulars printed in the statement, the
employer
must inform the EPF in writing within a month from the date of receipt of
the
statement. If no complaints are received within this period, the EPF willassume
that the contributions are correctly credited into the members' accounts.
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Notify any change Of Address
Employers must notify the EPF in writing of anychange of address not later than
14 days from the date of change.
Notify any change Of Name/Employer Status
An employer, who has changed its name or status
such as change from sole
proprietor to company must notify the EPF not later
than 21 days from the date of
change of status by completing a new Form EPF 1.
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Termination Of Employee and Not Liable To Contribute Temporarily
An employer, who has no employee for a temporary period, must return
the Form
EPF 6 (Form A) to the EPF with the word 'Nil' written in the column forcontribution
every month until the employer engages an employee.
Cessation Of Liability and Subsequent Re-employment of Employees
An employer who has no employees or does not intend to recruit any
employee
in the future must notify the EPF Board through Form EPF 6 (Form B)
within the
period of 30 days from the date the employer ceases to contribute.
However, if an employee is subsequently employed, the employer must
be
registered with the EPF by completing another Form EPF 1. The EPF Board
will issue a new employer's reference number and send all the relevant
documents to the employer.
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Immediate Response To Any Enquiry Form The EPF
any enquiry from the EPF whether throughtelephone, correspondence, visit by
an EPF inspector or through e-mail should be given
immediate response.
Contact The EPF Regarding Any Problems On
Contributions
Any enquiry in relation to problems on contributions
should be referred to the nearest EPF office
or Enquiry
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Benefits
Retirement Incapacitation
Dividend Death
Tax
Incentives
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Retirement
Contributions of :
> Employer - 12%
> Employee - 11%
Consists of 2 accounts which is:> Account 1 60%
> Account 2 40%
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Dividend
The contributions kept in the EPF will
accumulate with dividend every year.
Death Withdrawal
RM2,500 is paid to the next-of-kin upon a
members death.
Incapacitation withdrawal
RM5,000 is paid to a member upon
Incapacitation.
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