The association said the plan, announced by human resources minister Steven Sim in the Dewan Rakyat on Oct 4, must begin with a proper definition of who qualifies as a gig worker, independent contractor, or employee, as each carries different legal implications and obligations.

“Before extending the EIS to new labour categories, the government must clarify which workers are covered, how contributions will be shared among workers, platforms and the government, and how the scheme aligns with existing social protection laws to avoid duplication,” it said in a statement.

The EIS, managed by the Social Security Organisation (Perkeso), provides temporary income replacement and job search assistance to formal sector workers who lose their jobs.

Sim told the lower house that he had instructed Perkeso to study the feasibility of extending the scheme to gig and platform-based workers to ensure income protection for those in non-traditional employment.

Micsea said it supported the government’s aim of improving social safety nets but warned that any expansion of the EIS must consider the economic realities faced by businesses, particularly small and medium-sized enterprises.

“Any additional statutory obligations, whether in contributions, administration or reporting, should be introduced gradually with predictable cost structures,” it said, adding that employers already faced rising operational and compliance costs.

The group recommended an evidence-based approach, including transparent actuarial modelling, pilot programmes to test feasibility in selected sectors, and the full disclosure of administrative costs and benefit metrics.

“These steps will ensure that the expansion of the EIS does not inadvertently reduce business competitiveness or alter hiring dynamics,” it said.

Micsea added that it was ready to participate in stakeholder consultations, saying that with clear scope and balanced cost-sharing, Malaysia could improve worker protection without undermining enterprise growth.