Platform companies that fail to make the mandatory 10% social protection contribution for gig workers will face firm penalties under Malaysian law. The requirement is set out in the Self-Employment Social Security Act 2017, which aims to ensure that gig workers receive proper protection through the national social security system.

Deputy Minister of Human Resources Datuk Seri Abdul Rahman Mohamad explained that enforcement remains a priority to safeguard the welfare of gig workers across the country.

Offences Can Lead To Fines Or Imprisonment

Under Clause 108 of the Self-Employment Social Security Act 2017 (Act 789), companies or individuals found guilty of failing to make the required contribution may face a fine of up to RM50,000, a maximum prison term of two years, or both.

Abdul Rahman highlighted these penalties during an oral question and answer session in the Dewan Negara. He was responding to a question from Senator Tuan Che Alias Hamid, who sought clarification on the consequences for platform companies that do not fulfil the mandatory contribution.

The contribution forms part of the wider effort to ensure gig workers receive social protection similar to formal-sector employees. This includes coverage for work-related injuries, disability, and other contingencies under the Social Security Organisation (Socso).

What This Means For Consumers

The stricter enforcement is intended to strengthen protection for gig workers, including riders, drivers, freelancers, and service providers who support Malaysia’s digital and on-demand economy. When platforms comply with contribution requirements, workers receive coverage for work-related risks, which can improve overall service stability.

For consumers, this may support a more reliable gig economy by helping workers access medical, disability, or income support if accidents occur while performing jobs. Stronger enforcement helps ensure gig platforms fulfil their responsibilities, which in turn supports safer and more sustainable services for the public.

Thousands Of Employer Offences Prosecuted This Year

Abdul Rahman also addressed employer compliance more broadly. Responding to a question from Senator Datuk Ahmad Ibrahim, he reported that a total of 4,564 prosecutions have been initiated as of October for various employer-related offences.

Out of this total, 1,276 cases, or 27.95%, involved employers who failed to contribute to Socso, with arrears amounting to RM31.14 million. These figures reflect the government’s ongoing focus on enforcing statutory contributions, particularly in the context of rising participation in gig-based work.

No Compounds Issued, Direct Prosecution Applied

According to Abdul Rahman, the government is not issuing compound notices to employers who default on mandatory contributions. Instead, enforcement action is taken directly through prosecution in court.

He emphasised that this approach is intended to ensure full compliance with Socso and the Employees Provident Fund (EPF) contribution requirements, and to protect workers who may otherwise be left without essential safety nets.

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