HR minister says 2,713 SMEs have closed since March shutdown; 388 complaints of employers abusing wage subsidies

Human Resources Minister Datuk M. Saravanan is pictured at Parliament in Kuala Lumpur July 20, 2020. — Picture by Yusof Mat Isa
Human Resources Minister Datuk M. Saravanan is pictured at Parliament in Kuala Lumpur July 20, 2020. — Picture by Yusof Mat Isa

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KUALA LUMPUR, Nov 18 — Parliament was today told a total of 2,713 companies with small and medium enterprise (SME) status have shuttered between March and October this year — which is when the movement control order (MCO) and its various phases were imposed.

Human Resources Minister Datuk Seri M. Saravanan also said records from the Social Security Organisation (Socso) show that 221 employers have received aid under the wage subsidies programme (WSP) and had closed shop during the same period.

He said the records were from Socso’s Employment Insurance Scheme (EIS) which recorded the numbers of those who had lost their jobs.

Saravanan said his ministry did not have records of how many people had become bankrupt during the same period as such records were with the Insolvency Department.

However, he said the government has doubled the debt ceiling for those seeking bankruptcy, from RM50,000 to RM100,000, in a move to decrease the number of bankrupts. The amendment was made to the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 increased the amount of debts for someone seeking bankruptcy.

Saravanan was responding to Klang MP Charles Santiago who asked the number of companies that had received wage subsidies and were forced to close down; the number of SMEs that have closed down and individuals who have gone bankrupt from March to October due to the pandemic; the number of employers who have received wage subsidies but did not give those funds to their employees; and how the employers have been punished.

About wage subsidies programme (WSP)

Saravanan also told the Dewan Rakyat that Socso has received 388 complaints by employees towards employers who abused the WSP payments involving funds of nearly RM20 million.

“In the same development, Socso will suspend payment to employers who are suspected of making false claims until the investigations on such complaints are complete,” he said.

Out of the 388 complaints, Socso has identified 156 cases of false claims and WSP funds misuse and will act to claim those funds back from the employers.

As for the remaining 232 of the 388 complaints, these are currently in the process of inquiries to complete information on the complaints to enable further action, Saravanan said.

Socso is also working with the Malaysian Anti-Corruption Commission (MACC) on this matter, with one out of five cases still under MACC’s probe already resulting in arrests in Kedah on October 6, he added.

At the same time, Socso has also identified 5,537 employers who have breached the terms and conditions of the WSP and were blacklisted, with the reasons for blacklisting including termination of employees and not paying contributions to Socso.

Saravanan also said Socso will continue to share full information to enable investigations to be initiated against employers who fail to comply with the WSP conditions, and said Socso will display the list of employers who have received WSP on Socso’s Prihatin portal for the notification and reference of workers as well as to enable monitoring.

Charles then said he had received many complaints of employers receiving wage subsidies from the government while the employees were either given months of unpaid leave or retrenched.

Saravanan then said that the purpose that the government was providing wage subsidies was to ensure companies can continue to operate.

He said that he was uncertain about the idea to channel such aid directly to employees and that this will need to be studied, but said this could possibly be done after it was studied.

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