LHDN Penalty Waiver 2025: Employment Contract Deadline

LINDUNG 24 JAM Update: SOCSO Protection Is Now Optional for Local Employees, Still Mandatory for Foreign Workers

Back in May, we told you about LINDUNG 24 JAM — PERKESO’s new scheme that finally covers employees for accidents that happen outside of work, like a fall at home or a mishap on a family trip. At the time, contribution was mandatory for everyone.

That has now changed. Following a Cabinet decision on 8 July 2026, local employees can choose to opt out of the scheme, while foreign workers remain covered on a mandatory basis. Here’s what employers and employees need to know.

July 20, 2026

What Is LINDUNG 24 JAM Again?

LINDUNG 24 JAM (the Non-Work-Related Injury Scheme, or SKBBK) gives eligible employees round-the-clock protection during their employment including accidents that happen outside working hours and have nothing to do with their job, such as:

The scheme took effect on 1 June 2026 under the Employees’ Social Security (Amendment) Act 2026.

What Changed on 8 July 2026?

Local employees: Participation is now voluntary. Employees who do not wish to join must actively opt out otherwise they will be automatically enrolled.
Foreign workers: Contribution remains mandatory, with no opt-out option.
Opt-out window: 13 July 2026 to 31 August 2026, via the LINDUNG Faedah Portal (or by submitting a Notis Pelepasan Liabiliti if the portal is unavailable).
Employees who don't submit an opt-out by 31 August 2026 are automatically treated as having joined the scheme.

⚠️ Important:
June 2026 contributions already deducted remain mandatory by law and are not refundable, since they were collected before the 8 July Cabinet decision.

Contribution Rates

The contribution is borne entirely by the employee (employers do not contribute to this scheme) and is implemented in three phases, based on monthly salary up to the current salary ceiling of RM6,000.

Phase 1

0.75%

1 June 2026 – 31 May 2028

Phase 2

1.00%

1 June 2028 – 31 May 2031

Phase 3

1.25%

From 1 June 2031 onwards

Key Benefits

Employees who join the scheme (or are mandatorily covered) are entitled to:

Medical Benefit Free treatment at PERKESO panel clinics or government hospitals.

Temporary or Permanent Disablement Benefit Income replacement during recovery or for permanent disability.

Constant Attendance Allowance RM500 per month for employees requiring full-time care.

Rehabilitation Facilities Physiotherapy, occupational therapy, prosthetic devices, and related rehabilitation services.

Dependants’ Benefit Financial assistance for eligible family members if the employee dies due to a non-work-related accident.

Funeral Benefit Up to RM3,000 towards funeral expenses.

Education Benefit Loan assistance for dependent children in qualifying cases.

What’s Not Covered

✕ Accidents occurring outside Malaysia.
✕ Employees who have opted out of the scheme.
✕ Work-related accidents (covered under the existing Employment Injury Scheme).
✕ Self-employed persons (covered separately under the Self-Employment Social Security Scheme).
✕ Self-inflicted injuries, suicide, fraud, or accidents involving criminal acts.
✕ Foreign workers who misuse their work pass or permit.
✕ Accidents occurring before the scheme’s effective date of 1 June 2026.

What Employers Need to Do

Continue deducting and remitting LINDUNG 24 JAM contributions for all foreign workers and for local employees who have not opted out.
Take note that PERKESO is providing a 6-month grace period from enforcement, during which no penalties apply for non-compliance specific to this scheme (other statutory obligations remain applicable).
Record and register the opt-out choice (if any) for newly hired local employees within 30 days of their registration.
⚠️ Failure to deduct and remit contributions correctly may result in enforcement action. Upon conviction, employers may face:
- Up to 2 years’ imprisonment,
- A fine of up to RM10,000 or
- Both imprisonment and a fine.

Conclusion

LINDUNG 24 JAM continues to provide valuable protection for employees after working hours, but the rules on who is covered have changed. Local employees now have the option to opt out, while foreign workers remain mandatorily covered.

Employers are responsible for ensuring payroll deductions and opt-out records are managed correctly during the transition period. Maintaining accurate payroll records will be especially important until 31 August 2026.

Official Resources

For full details and to manage opt-out elections, visit:

For enquiries, contact the PERKESO Call Centre at 1300-22-8000.