Do you know the details of your exact contact with the company? The only time they can get away with not paying EPF or Socso is if you're being retained as a contractor (note that this is different from being a contract worker). Think of it as being similar to how you engage somebody to renovate your house, where you only pay for the services rendered, and not pay for EPF or Socso.

So you'll need to dig into your existing contract to find out what the fine details are.

As for the importance, it's critical literally for anything like applying for a credit card, loans, etc. Most times banks won't regard the payslips as sufficient proof of income, and will ask to see your EPF balance.

An ex-boss did try to legalise not paying of EPF/Socso on us before. He tried to ask us to register a business then he'll engage with our registered business instead. We all left and he had to shut down.

Gosh. That's sneaky! If you guys had done that, you might run into the problem of setting up "shell" companies and be accused of tax avoidance by LHDN!

I have done this on both sides (buyer of services and seller of services) and there is nothing wrong with this model, however the negotiation is on a completely different level ie. it's no longer salaries but a service charge, and the costs as a service buyer will be much higher.

For example if an individual's salary was RM4k, I used to pay closer to RM10k monthly for services, the extras are EPF/SOCSO/benefits that I don't have to pay as a service buyer and you get as cash as a service provider. When I became the service provider, I set up a company and paid myself a salary/benefits instead.

In the case of the TS though there is no contract ie. signed offer letter, hence he should get his own SOCSO protection and get a new job as soon as realistically possible

This post has been edited by tishaban: Aug 12 2020, 11:49 AM

A few of us ended up setting up Sdn Bhds anyways, as some of the clients actually approached us wanting to engage us directly.

But yeah, for the case of the TS, what I'm curious about is the current nature of his engagement, and what's on the existing contract is there is one.

Maybe i should tell more, Currently i am working at a branch. The HR is on the HQ. The "boss" here keep telling me he will settle with HR and so on.. but when i try to contact HR.. he stop me from then... my boss here keep saying in process.. i know something fishy...either HR stop hiring for now.. or he just hire me without HR knowledge.. i dont think the company fault here. sorry

I should explained sooner.

The key now is to protect yourself no matter what happens, while maintaining your income

First do SOCSO as I gave earlier

Are you getting paychecks? Direct debit to your account? PCB (ie. deduction of taxes by LHDN) done correctly? Call up LHDN and confirm
Keep all records (bank statements, payslips)

If LHDN deduction is not done correctly, ask LHDN for help on how to calculate etc. If your pay is not high then there's no taxes to pay so you may be safe but only LHDN can say that.

Since this sounds shady and since you're already receiving money for the past 5 months, try your best to cover your ass for the future.

Is it correct to say that there's totally no existing signed contact between you and the company at the moment?

You can always contact your HR directly, any reporting managers is not able to stop ppl from talking to HR directly for anything. However keep in mind that your manager may not be happy if he finds out (definitely will as HR will ask him what is going on).

The best course of action will be like what others have suggested, which is to start looking for a new job in the mean time. You'll probably be wanting to stay on for the time being if you need the income. You do also have the option of asking HR what's going on with your engagement with the company once you've got a new job secured.

ps. needless to say, a job is only considered as secured once you've signed the contract, and not before. not even on a verbal offer. in fact, you don't want to start work before signing the contract, so keep this in mind before you leave for any new jobs you secured.

edit: thinking back again on what you said. HR is the one who handles the payroll. if you're hired without HR knowing, then you won't get paid. Unless it's like what I suspected where you're being retained as a contractor, then your boss may be able to pay you directly from his team's operating budget for services rendered.

This post has been edited by malleus: Aug 12 2020, 12:19 PM

Agreed

Thank you bro. Yes i will be careful in the future.

Yes i still got paid.... he promised me when i entered office he will give me offer letter and start my probation... but it has been three months and he keep saying processing... i will keep working until i secure a job then.

Since you oredi know the huha .. the next is are you going to walk out after receiving your pay and join the next company ?

Is better you decide now how you plan your exit.