An additional 300,000 more workers will be covered under mandatory insurance for work-related injuries while maximum payouts will be raised, under a new law passed in Parliament yesterday.
Employees placed on light duties owing to work injuries will also receive medical leave wages for up to two weeks, while companies with poor safety records may face higher insurance premiums when more information is available to insurers.
These and other changes will make the system better for both employers and employees, Minister of State for Manpower Zaqy Mohamad said in introducing the Work Injury Compensation Bill 2019 .
He said the Bill aims to incentivise employers to prevent injuries, speed up claims processing, enhance insurance coverage and benefits for injured employees, and provide a balanced package of safeguards for both parties.
From Sept 1 next year, the Ministry of Manpower (MOM) will share claims data with approved insurers and let them to verify companies' declared workforce and annual payroll with MOM's database.
This is so that insurers can offer lower premiums to companies with good safety records, said Mr Zaqy.
"Less-safe employers who are faced with higher premiums will have greater commercial incentive to put in place measures to prevent their employees from getting injured in the first place," he said.
The Bill also raises the maximum compensation amount from Jan 1 next year to $225,000 for death and $289,000 for total permanent incapacity. This is 10 per cent higher than the current caps.
The maximum compensation for medical expenses also goes up to $45,000, from $36,000.
These caps are being updated to keep pace with rising wages and healthcare costs, said Mr Zaqy.
All non-manual employees earning up to $2,600 a month will need to be covered by work injury compensation insurance, not just those working in factories and earning below $1,600. The salary threshold will be raised in two stages: to $2,100 on April 1 next year, and to $2,600 a year later.
Another change is to give employees placed on light duties similar compensation as those placed on medical leave. Workers on light duties should be paid their average monthly earnings, including overtime, bonuses and allowances, for 14 days, and then two-thirds of this amount for up to one year from the accident.
Employers will have to report any instance of employees on medical leave or light duties due to a work injury. "This is to address the concern that some irresponsible employers may try to avoid reporting work accidents by attempting to influence doctors to give fewer days of medical leave or light duties," said Mr Zaqy.
To expedite claims processing, permanent incapacity compensation can be based on current incapacity at least six months after an accident, instead of waiting for an assessment of the degree of permanent incapacity to be made after a longer period.
Mr Zaqy said that about 20 per cent of permanent incapacity claims take longer than six months to be resolved due to the time taken for an assessment, which results in higher upkeep expenses for employers and uncertainty for employees.
The Bill replaces the existing Work Injury Compensation Act (Wica), which was last amended in 2011.
On average in the past three years, about 15,000 work injury compensation claims were awarded, with a total payout of close to $115 million a year for wage and lump sum compensation.
MOM will also provide more certainty for employers through setting standard terms for Wica-compliant insurance policies, and allowing them to seek to recover full compensation paid due to error, or false or misleading information.
Finally, MOM will raise and add penalties for offences such as not paying compensation or withholding the necessary documents for claims processing.
Key changes in 2019 Work Injury Compensation Act
• All non-manual employees earning up to $2,600 a month will need to be covered by work injury compensation insurance, not just those working in factories and earning below $1,600.
• Maximum compensation raised to $225,000 for death, $289,000 for permanent incapacity and $45,000 for medical expenses. Previous limits were $204,000 for death, $262,000 for permanent incapacity and $36,000 for medical expenses.
• Employees on light duties after a work accident will still receive average monthly earnings - including overtime, bonuses and allowances - for 14 days, and two-thirds of this for up to a year. Previously, wage compensation was only for those on medical leave.
• Employees can apply to change doctors without the employer's consent if they believe their injury is not being assessed fairly.
• Only government-approved WIC insurers can sell WIC policies.
• MOM will define a core set of insurance terms and conditions to prevent unfair exclusions.
• Lower premiums for companies with good safety records.
• Employers can seek to recover full compensation paid due to error, or false or misleading information.
• WIC insurers will process all insured claims, instead of some being processed by MOM.
• Claims processing for serious injuries or death will start automatically once an accident report is made.
• Compensation can be based on current incapacity as assessed by doctors, instead of needing to wait for a permanent incapacity assessment.
• Industry salary data will be used to calculate compensation if payslips are not available, rather than waiting for the dispute over salary to be resolved.
Correction note: The story has been edited for clarity.