Enforcement

1. Inspections

The rationale behind enforcement and inspections are to ensure that employers adhere to the Employees’ Social Security Act 1969 and Employees’ Social Security (General) Regulations 1971. An Inspector appointed under Section 12 of Employees’ Social Security Act 1969, shall exercise his powers, perform his functions and discharge his duties in compliance under this Act.
All inspection activities will be carried out to registered employers with SOCSO in Malaysia.

Objectives

Ensure that employers adhere to the Employees’ Social Security Act 1969 and Employees’ Social Security (General) Regulations 1971
Ensure all related records are well maintained
Update employer details
Collect contributions in arrears and short payment contributions
Collect Interest on Late Payment of Contributions
Investigate any complaints received
Give explanations to employers
Assist employers that are facing difficulties with SOCSO contributions or benefits

2. Compound

Compound are provided for under Section 95A, Employees’ Social Security Act 1969, where a Director General or any empowered officer by the Director General may impose compounds to anyone who has committed offences under Regulation 2 of the Employees’ Social Security (Compounding of Offences) Regulations 2006.
The Employees’ Social Security (Compounding of Offences) Regulations 2006 has been gazetted with effective from 1 March 2006.

Offences that can lead to compound
Under Regulation 2 of the Employees’ Social Security (Compounding of Offences) Regulations 2006, types of offences that are subject to compound are as stipulated under sub-section 94(e) and (g) of the Employees’ Social Security Act 1969. The offences are are not related to the financial contributions by employers to SOCSO, such as:
i. Late in registering of industry
ii. Late in registration of employees
iii. Unable to produce or no Employee Register
iv. Unable to produce or no Employee Register
v. Unable to produce SOCSO Contribution Schedule

How compound are administered

Compound notices are issued by SOCSO upon receiving information or complaints that a compound of offence has been committed.

The offer to compound an offence is valid for 14 days. If full payment for the offer amount is made within the 14 days, no further actions will be taken.

However, if no payment is made after 14 days of the issuance of the compound offer, or to an extension deadline allowed by the Director General, further actions to prosecute will be initiated without further notice.

Paying Compounds
- Whenever there is a compound offered for any offences and accepted, payment can be made through the Money order, Postal order, Banker’s Order, Bank draft. Payments must be made to the Director General of SOCSO and addressed as set out in the Notice Offer for Compound.
- Every payment received will be given an official receipt.
- The compound amount that can be offered should not exceed 50% of the maximum amount for the respective offence. The maximum amount of compound that can be levied is RM5,000. However, for the moment, SOCSO is issuing compounds based on the following schedule:

Types Of Offences That Can Lead To Compound

No	Legal Provision	Type of Offence	Offence Criteria	Compound Amount
1	Section 4	Late in registering of industry	Late Registration Period;
			Exceeds 30 days but less than 1 year	RM500
			Exceeds 1 year but less than 2 years	RM1500
			Exceeds 2 years but less than 5 years	RM2000
			Exceeds 5 years	RM4000
2	Section 5	Late in registration of employees	Late Registration Perid;
			Exceeds 30 days but less than 1 year	RM500
			Exceeds 1 year but less than 2 years	RM1500
			Exceeds 2 years but less than 5 years	RM2000
			Exceeds 5 years	RM4000
3	Regulation 34(1) and (2)	Failure to present or no Employee Register	Failure to present or maintain an Employee Register:
			Within 7 years after the first inspection	RM300
			Within 7 years after the second inspection and so forth	RM600
4	Regulation 71(1) and (2)	Late in informing of an accident beyond the allowable time	Fatality Period :
			More than 2 months but less than 1 year	RM1000
			Exceeds a year	RM1500
			Injury due to work accidents at workplace: Period :
			more than 2 months but less than 1 year	RM1000
			Period : exceeds a year	RM1500
			Injury due to commuting accidents: Period :
			More than 3 months but less than 1 year	RM1000
			Exceeds a year	RM1500
5	Regulation 44A	Failure to present rate of contribution	Unable to provide SOCSO Contribution Schedule for employees :
			Within 7 years after the first inspection	RM300
			Within 7 years after the second inspection and so forth	RM600

3 Prosecution

Under the Employees’ Social Security Act 1969, an employer or employee that is found guilty for the following offences may be fined not more than RM10,000 or 2 years imprisonment or both if convicted of:

Types Of Prosecution That Can Lead To Prosecution

Bil	Peruntukan Perundangan	Jenis Kesalahan
1	Section 4	Failure or late in registration of industry
2	Sectionn 5 and Regulation 12(1)	Failure or late in registration of industry
3	Section 6(1) & (8) and Regulation 32	Failure or late in payment of employee contribution to SOCSO
4	Section 14(A) & Regulation 33	Failure or late in payment of Contribution Late Payment Interest to SOCSO
5	Regulation 71(1) & (2)	Employer failure to or late in reporting of accidents
6	Section 93(A)	Provide, produce or present fraudulent documents or information
7	Section 110(1)	Failure to pay fines

Function

The primary function for the Recovery Unit is to reduce the non-performing loans such as education loan and also over payment of benefits paid out to victims or beneficiaries.

The unit will be called into action if a loan facility installment is not paid, and if there is any case of over payment to victims or payments were made to unintended beneficiaries.

Among the activities conducted includes:

Recovery visitations to the workplace of the loan recipient or guarantor for stubborn cases
Recovery visitation to the homes of loan recipient, victims or beneficiaries where there is failure to pay scheduled installments or overpayment cases
Recovery visitations for cases out of the Klang Valley by organizing meetings with the loan recipients or guarantors for hardcore borrower at state SOCSO offices or local SOCSO offices

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