The extension of the Invalidity Scheme under Malaysia’s Social Security Organisation (“SOCSO”) to foreign employees¹, effective 1 July 2024, should not merely be viewed as an additional legal obligation for employers. Instead, it can be seen as an initiative that encourages companies and businesses to align with ESG principles.

“[T]he extension of the Invalidity Scheme … demonstrates a commitment to social equity and the protection of vulnerable groups [and] drives improved governance practices.”

Since 2019, foreign employees in Malaysia have been covered only by the Employment Injury Scheme under SOCSO, which mandates employers to contribute to the said scheme in respect of each foreign worker hired. The Employment Injury Scheme provides protection to employees against accidents or occupational diseases arising out of and in the course of their employment².

Now, both employers and foreign employees in Malaysia must also contribute to the Invalidity Scheme, which was previously available only to local employees below the age of 60³. The Invalidity Scheme provides 24-hour coverage to employees who suffer from invalidity or death due to any cause⁴.