An employee who is employed under a contract of service or apprenticeship and earning wages of RM2,000 and below must compulsorily register and contribute to Socso regardless of the employment status whether it is permanent, temporary
or casual in nature.
An employee must be registered with Socso irrespective of the age.
In computation of wages the following payments (a) Salary (b) Overtime payments (c) Commissions and service charge (d) Payments for leave; annual , sick, maternity, rest day, public holidays and others (e) Allowances; incentive, shift, food, cost of living, housing and others are taken into account on deriving the mandatory RM2,000 and below requisite contribution by an employer to SOCSO.
All payments made to an employee paid at an hourly rate, daily rate, weekly rate, piece or task rate is also considered as wages.
However, the following payments are not considered as wages:
1. Payments by an employer to any statutory fund for employees
2. Mileage claims
3. Gratuity payments or payments for dismissal or retrenchments
4. Annual bonus
The term “employer” has been categorised into principal employer and immediate employer:
Principal employer – refers to the employer who has employed the employee directly to work for him/her. The employer undertakes the payment of wages and all the service matters of the employee.
Immediate employer – refers to an employer who works for a principal employer or undertakes a part of the work of the principal employer by subcontract . The immediate employer has direct control of the employees employed by him/her.
Hence, employers include subcontractors and outsourced service or jobs. This is most important in Malaysia construction industry where there are more likelihood of occurences of injuries in course of performance of work.