Malaysia’s Socso accident protection scheme turns voluntary.

Malaysia’s Cabinet decided on 8 July 2026 to make contributions to the Social Security Organisation (Socso)’s Lindung 24 Jam accident protection scheme voluntary for Malaysian employees, reversing the mandatory rollout that took effect on 1 June. Contributions remain compulsory for foreign workers under existing legal provisions.

For employers in Malaysia, this means that payroll must now handle two rules at once, an opt out option for local employees and unchanged mandatory deductions for foreign workers.

What the Lindung 24 Jam reversal means

Lindung 24 Jam extends Socso protection to accidents that occur outside working hours and are unrelated to employment. The scheme is funded entirely through employee payroll deductions, phased in across three stages from 0.75% to 1.25% of monthly wages, capped at a wage ceiling of RM6,000. Employers do not make additional contributions under the scheme and continue to deduct and remit contributions as before.

Following the Cabinet’s decision, participation is voluntary for Malaysian employees. Foreign workers remain subject to mandatory contributions, and employer obligations for this group are unchanged.

Opt-out process and deadline

Malaysian employees who no longer wish to participate can opt out between 13 July and 31 August 2026 by submitting a declaration through Socso’s online portal. Employees who complete this process receive a confirmation form, which they should provide to their employer for payroll records. Employees who do not submit an opt-out declaration by 31 August continue to be enrolled and contributing by default.

What remains unchanged

Contributions already deducted for June remain payable and are not refundable, since the scheme was mandatory at the time. Employers who deducted the June contribution but have not yet remitted it should proceed with payment as normal. Where a June contribution was not deducted for an employee who remains in the scheme, the employer is responsible for collecting and remitting the outstanding amount.

Next steps for employers

For businesses with Malaysian employees, this changes an active compliance obligation into an optional one. The immediate step is to update payroll processes to handle both enrolment tracks correctly from the next pay cycle, and to prepare a short explanation for local staff covering what changed, what stays the same for their take home pay if they remain enrolled, and how to opt out if they choose to.

Employers with a mixed local and foreign workforce carry the most complexity, since the same payroll run must now apply different rules depending on each employee’s status. Confirming that foreign worker deductions remain unaffected is a useful first check before making any other payroll changes.