Filling a protection gap
Malaysian employers hiring domestic workers now have access to a new insurance scheme introduced by the Malaysian Association of Employment Agencies (PAPA).
Speaking at the launch, PAPA president Datuk Foo Yong Hooi said the initiative was created to address a gap in the current recruitment system.
He noted that agency guarantee periods usually last between three and six months, after which employers are often left to shoulder the financial risk on their own.
Compensation during first year
One of the scheme’s key features is RM5,000 compensation for employers if a domestic worker absconds during the insured period.
The insurance, developed with GMAT Sdn Bhd and Allianz Malaysia, is intended to help cover recruitment and placement costs. Foo said the first year carries the greatest risk, so the abscondment benefit only applies during that period.
From the second year onwards, employers will no longer receive the RM5,000 payout, although other benefits remain available.
Medical benefits broadened
The policy also covers hospitalisation and surgery for general illnesses, extending beyond protection for work-related injuries.
If a domestic worker is medically certified as unfit for duty, the insurance provides weekly compensation for up to 12 weeks. Limited assistance is also available for the loss of essential documents, including passports.
Foo said the programme helps address a gap because Social Security Organisation (PERKESO) coverage is limited to work-related accidents, while domestic workers have lacked illness-related medical coverage as they are classified as informal workers.
Available to more employers
Foo said the insurance provides wider protection than an abscondment policy introduced about two decades ago, which was later discontinued because of fraudulent claims.
He also pointed to cases where pre-existing medical conditions were only discovered after employment had begun, leaving employers with unexpected costs. Although the scheme was first introduced for PAPA members, employers outside the association can also purchase the policy.
GMAT chief executive officer M. Marimuthu said applications can be made online, with reimbursement available for eligible hospitalisation and surgical treatment at private hospitals, subject to the policy’s limits.
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