New insurance scheme for domestic workers and employers covers abscondment, hospitalisation and illness, addressing key protection gaps.
KUALA LUMPUR: The Malaysian Association of Employment Agencies (PAPA) has launched an insurance scheme aimed at providing balanced protection and addressing structural gaps for both employers and domestic workers in the country.
Its president, Datuk Foo Yong Hooi, said the policy introduces critical coverage features, including compensation for abscondment, hospitalisation and illness, which were previously overlooked.
“This initiative was developed in response to a structural gap in the current domestic worker recruitment system, where the guarantee period typically ranges from three to six months. Once this expires, employers are often left fully exposed to financial risk,” he told reporters after the launch of the programme.
Under the scheme developed with GMAT Sdn Bhd and Allianz Malaysia, employers will receive RM5,000 in compensation if a domestic worker absconds during the insured period, to help offset recruitment and placement costs.
“The first year is the highest-risk period. Beginning in the second year, the RM5,000 runaway worker benefit will no longer apply, but other benefits, including personal accident and hospitalisation coverage, will remain in force,” he said.
The policy also provides hospitalisation and surgical coverage for domestic workers, extending beyond work-related injuries to cover general illnesses. It includes weekly compensation for up to 12 weeks if a domestic worker is medically certified as unfit for duty, as well as limited assistance for loss of essential documents such as passports.
Foo said the scheme offers broader protection compared to a similar abscondment policy introduced two decades ago, which was discontinued due to fraudulent claims, and also addresses the lack of illness-related medical coverage for domestic workers because they were classified as informal workers.
“Social Security Organisation (PERKESO) coverage is limited to work-related accidents… and this programme is designed to help address that gap,” he said, citing cases where pre-existing medical conditions were only detected after employment, resulting in unexpected financial burden on employers.
Foo said the programme, although initially introduced for PAPA members, is also open to other employers with domestic workers.
Meanwhile, GMAT Sdn Bhd chief executive officer M. Marimuthu said the policy can be purchased online and allows reimbursement of hospitalisation and surgical expenses at private hospitals, subject to limits.
