By ARFA YUNUS and KHOO JIAN TENG
PETALING JAYA: The revised penalty structure for employers who fail to notify the Social Security Organisation (PERKESO) of job vacancies is unlikely to significantly reduce unemployment, with economists saying deeper structural issues in the labour market remain the bigger challenge.
Centre for Market Education chief executive officer Carmelo Ferlito said the amendments could marginally improve the visibility of vacancies within PERKESO’s system but would have only a limited effect on overall unemployment.
“The main challenge is often not the lack of information about vacancies, but rather skills mismatches and the quality of job matches,” he said when contacted.
Ferlito noted that most employers already recruited through multiple channels, including private job portals, recruitment agencies, professional networks and social media.
He said imposing reporting requirements and penalties increased compliance costs without addressing the root causes of unemployment.
“Considering the prevalence of MSMEs (micro, small and medium enterprises) in Malaysia’s economic structure, I believe the measure is more likely to create additional burdens for small businesses than play an effective role in reducing unemployment,” he said, noting that Malaysia’s jobless rate remained relatively low.
While the amendments could provide jobseekers with more information and strengthen PERKESO’s placement services, Ferlito said they were unlikely to substantially shorten the time unemployed workers took to secure new jobs.
“The speed at which displaced workers find new employment depends more on labour market flexibility, skills compatibility and the availability of job opportunities than on vacancy reporting alone,” he said.
Instead, he urged the government to improve labour market dynamism by reducing barriers to hiring, strengthening technical and vocational education and training (TVET), encouraging entrepreneurship, improving labour mobility and aligning education more closely with industry needs.
“A growing and flexible economy creates opportunities naturally. Administrative requirements can support the process, but they cannot substitute for the conditions that generate employment in the first place,” he said.
Meanwhile, economist Geoffrey Williams warned that lower penalties could weaken protections for workers relying on the Employment Insurance System (EIS).
He said the revised structure, which reduced the maximum fine from RM10,000 to a tiered system of RM1,000 for a first offence, RM3,000 for a second offence and RM5,000 for subsequent offences, could delay access to EIS assistance if employers failed to notify PERKESO promptly.
Lower penalties, he said, could also reduce the incentive for employers to comply.
“This benefits employers at the expense of employees because it makes it easier to delay the process,” he said.
Williams said weaker enforcement could further tilt the balance of power towards employers, encouraging “hire-and-fire” practices and contributing to stagnant wage growth.
He added workers needed stronger bargaining power to secure fair wages, but weaker employment protections and limited union representation left employees, particularly low-paid and low-skilled workers, more vulnerable.
“Anyone depending on EIS is potentially worse off because of this.
“While employers may welcome the change, the impact on worker security should be carefully considered,” he said.
Source: penalties-wont-significantly-reduce-unemployment
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