Picture this: you’ve been working at your job for a good few months, with no problems whatsoever. Then, on a random day, you decide to check out your EPF balance. That is when you find out the amount hasn’t increased since you started your new job.
If it’s your first job and your EPF account empty, this means your employer hasn’t been contributing to your EPF all this while. At the same time, you should also check that your Socso contribution is up to date. We will explain more on this below.
What’s your next step? If you don’t know what you should do in this situation, read on.
The importance of EPF and Socso
If you’re in your first job and you’ve never understood the importance of EPF and Socso deductions in your pay, let us break it down for you.
EPF
EPF stands for the Employees Provident Fund. This fund is designed to provide social security and act as a retirement fund for private and non-pensionable employees.
Meaning, your EPF money will be the money you will fall back to when you retire. Your EPF can also be withdrawn when you need extra funds for some pursuits, such as buying a house or furthering your education. (The recently introduced EPF account 3 allows for withdrawals at any time, for any purpose).
Socso
If that’s EPF, then what’s the purpose of the other deduction in your account, Socso? Socso stands for Social Security Organisation (SOCSO), also known as PERKESO (Pertubuhan Keselamatan.
The purpose of Socso is to provide a social security net for workers through their many schemes. The main purpose is to protect employees against accidents and occupational disease during the employment period. This also extends to invalidity and death. More recently, it now provides unemployment benefits if you lose your job or help support you if you get injured on the job.
Read More:
What Is Socso?
How Much Can You Claim From EIS If You Lose Your Job?
EPF and Socso deductions are compulsory
According to Section 43(1) of the EPF Act 1991, “Every employee and every employer of a person who is an employee within the meaning of this Act shall be liable to pay monthly contributions on the amount of wages at the rate respectively set out in the Third Schedule,”.
Meaning, it is compulsory for your employer to deduct your salary for EPF and Socso contributions, while also making their own contribution towards your EPF funds.
How do I check if my employers have been making deductions?
Some really unscrupulous employers might stoop to making fake deductions on your payslip, meaning the payslip says that they’ve been making all the necessary deductions, but the money doesn’t go to your EPF account.
So how do you check to make sure that your employer has been making the right deductions and contributing to your EPF account?
Here are three ways;
1. Through the EPF website
First thing you can do is go to the EPF website and login to your account. There, it will show the balance of both your account 1 and 2.
2. Using the KWSP i-Akaun app
Another way you can check your EPF account is by using the EPF i-Akaun app. You can find the download link here for the Apple App store, and here for the Google Play Store, and from there all you have to do is login.
3. Using an EPF Self Service Terminal (SST)
And finally, you can also use an EPF SST to check your account balance and history. You can check for locations of EPF offices and SSTs near you here.
How to report your employers for not making EPF/Socso contributions/deductions
In this situation, the best thing you can do is to lodge a report against your employer with the EPF. The most complete option is to physically visit an EPF office to file a formal complaint.
All you need to do is follow these steps.
Step 1: Find the location of an EPF office near you.
Step 2: Bring the documents listed down here to the EPF office.
- Identity Card / Passport
- Monthly Salary Slip
- Termination Letter
- Income Tax Return Form (EA)
- Employment Agreement
- Appointment Letter
- Other related documents
Step 3: Go to the counter, and tell the EPF employee what you are there for. The employee will inform you of the next step.
EPF Whistleblower hotline
Another way you can formally register a report against your employer is by calling the EPF hotline.
The hotline can be reached here. From there, all you have to do is tell the agent the reason for your call, and they will help you with the next steps.
EPF will require you to email the necessary documents as listed above, so don’t forget to have that handy.
And that’s it! Once you’ve completed the steps given by the employee, your complaint will be formally registered, and waiting for further action from EPF’s part.
Will your employer know of your report?
One of the things that deter employees from reporting their employers even though they found out that their employers are not making the required contributions, is that they are afraid that their employer will find out about their report.
Well, we’re here to tell you that you have nothing to worry about, as EPF will keep your report confidential. There will be no way for your employer to find out that it’s you, even when they are charged by EPF.
So, you can make your report with peace of mind.
However, note that this doesn’t stop your employer from trying to find out who made the complaint in other ways.
What happens to the EPF/Socso contributions that weren’t paid?
Once your report has been formally submitted, EPF will contact your employer and ask them to pay the EPF/Socso arrears that they owe you.
Usually, at this point the employer will adhere to EPF’s orders, and will recompense you for all the missed contributions they were supposed to make.
However, in cases where the employer doesn’t have the funds to make the required payments, such as when the employer has fallen bankrupt, EPF will recompense you but only your side of the contribution.
Here’s an example;
Let’s say you work at company A, and company A hasn’t been making your EPF/Socso contributions for six months.
If your contribution monthly is supposed to be RM300 deducted from your paycheck and RM300 contributed by the company, it means that Company A now owes you RM3600 in EPF arrears if they didn’t make the required contributions for six months.
However, if company A still cannot make the payment even after the report has been made, then EPF will compensate your portion of the EPF contributions only.
So in this case, it will be RM1800.
Make sure your employer is making the necessary contributions
As mentioned many times throughout this article, it is imperative that all the necessary contributions for your EPF and Socso is made by your employer, as it will provide you with a much necessary social security net.
Hence, it is part of your responsibility to periodically check your EPF account, to make sure that the required contributions are being made.
And if it isn’t, well now you know what to do.
