Lawyer Niki Lim Hui Min warns that misunderstood exemptions and looming reforms could leave businesses exposed
Many Malaysian employers are still falling short of their legal obligations under the Employees’ Social Security Act 1969, and the numbers are not small. Recent reports suggest that 17–20% of companies have yet to register their workers with Perkeso.
For Niki Lim Hui Min, Advocate & Solicitor at Tam Yuen Hung & Co., the reasons often come down to a mix of misunderstanding and administrative oversight. She points out that some employers assume that paying workers in cash or hiring part-timers exempts them from registration.
“The issue is not always intentional non-compliance. Many smaller businesses, particularly family-run enterprises or those operating informally, still lack awareness of their legal obligations under the Act,” she says. “In other cases, it is simply administrative oversight or cost-cutting, where employers underestimate the risks of non-compliance.”
But that underestimation is not just risky – it’s dangerous, both legally and financially. Under the Act, the penalties for failing to register are severe. Section 94 of the Act provides that failure to comply with registration requirements constitutes an offence punishable by fines and/or imprisonment.
Meanwhile under Section 14, when an employer fails to make the necessary contributions, the Director-General of Perkeso may recover the unpaid contributions as a civil debt. There is also...
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