KUALA LUMPUR, Aug 2 ― The proposed Employment Insurance System (EIS) is a good effort but stronger safeguards are needed to prevent financial abuse, a federal Opposition lawmaker said today.

Klang MP Charles Santiago said he supports the government’s move to introduce the unemployment security net as it is necessary, but wants its financial model reviewed.

"It’s the financial model underlying the EIS that’s the problem. When there is already [funds] available in Socso and EPF contributed by employers and employees, why the need to tax more?” he told Malay Mail Online.

EPF refers to the Employees Provident Fund while Sosco refers to the Social Security Organisation.

Charles, an economist, said the federal government has access to billions of ringgit in the workers’ pension scheme, Socso, as well as the Human Resource Development Fund and said enacting a new legislation to force people to contribute was akin to "daylight robbery”.

"More taxes are only going to burden employers and employees who are already stretched financially, trying to make their due contributions.

"Also, the number of those being retrenched and the amount the government aims to collect for this scheme doesn’t make sense. For example if 20,000 are retrenched, why do you need a billion ringgit fund?” he asked.

Charles also urged Putrajaya to withdraw the Bill until all concerns are addressed, saying it was not feasible to keep taxing the public for no clear gain.

Under the new Bill, both employers and employees must contribute to the EIS fund, starting from 10 sen each for monthly wages not more than RM30, and RM19.75 respectively for both parties, for those with monthly wages more than RM4,000.

Employees are eligible to claim a part of their insured wages if they remain jobless for a period between three to six months.

The proposed law would also establish an Employment Insurance Committee, which would advice Socso on matters related to the EIS and the type of investment to be made, from monies raised from the said insurance.

The Bill applies to all industries, for employees with one or more employers. However, it bars spouses of employers, civil servants from both the federal and state governments as well as and domestic helps including house maids, cooks and drivers from the insurance coverage.