He said a new law was being drafted for the purpose and would be tabled in Parliament in June.
The prime minister expected the EIS to be enforced on Jan 1 next year, while interest payments would be made from Jan 1, 2019.
“Implementation of EIS will be made through subscription from employees and employers.
“The EIS fund will be managed by the Social Security Organisation (Socso),” he said in a statement today.
Najib said the EIS was a social safety net aimed at helping workers who had been laid off to obtain financial assistance and look for new job.
Apart from receiving financial assistance while looking for jobs, they will also be assisted in their job searches and given career counseling services, he added.
Najib said workers who lose their jobs would also be sent for retraining and skills upgrading courses to increase their employability.
He expressed confidence that EIS would be a long-term policy that would positively impact workers and employers.
The prime minister said that based on the experiences of other countries, EIS had helped stabilise the economy by promoting sustainable growth, especially during a downturn.
“With the EIS, labour market efficiency could be improved through efficient matching of supply and demand, thereby improving productivity and industrial competitiveness,” he said.