How will the Gig Workers Act 2025 improve welfare for gig workers?

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The Gig Workers Act 2025 Aims to Enhance Welfare Through Legal Recognition and Social Protection

The impending enforcement of the Gig Workers Act 2025 is poised to significantly improve the welfare of gig workers by establishing a clearer legal framework for their status and bolstering social safety nets. This legislative development is part of a broader governmental commitment to protect the well-being of individuals in the informal sector, which represents a substantial portion of the nation's workforce.
Strengthening the Social Safety Net for Informal Workers

The Gig Workers Act 2025 is set to provide a more defined legal structure to recognise the status of gig workers, thereby safeguarding their welfare. This initiative is crucial for strengthening the social safety net for the 3.45 million workers in the informal sector, who constitute 21.8 per cent of Malaysia's total workforce. The legislation aims to address the unique challenges faced by this demographic, ensuring they are not overlooked by national labour and social protection policies.
Introduction of Comprehensive 24-Hour Protection Scheme

Complementing the new Act, amendments to the Employees’ Social Security Act 1969 have introduced the 24-Hour LINDUNG Scheme. This scheme offers a more comprehensive form of protection that extends beyond traditional working hours, covering accidents that may occur at any time. This all-encompassing approach ensures that gig workers have access to social security benefits throughout their period of employment, irrespective of when an incident might occur.
Financial Incentives to Encourage Scheme Participation

To further encourage uptake and participation in social protection schemes, the government has allocated incentives under Budget 2026. These incentives include covering 70 per cent of contributions for first-time registrants in non-mandated sectors under the Self-Employed LINDUNG Scheme. Additionally, a 50 per cent subsidy is provided for voluntary contribution renewals in the second year, making it more financially accessible for self-employed individuals, including gig workers, to secure their future.
Growing Registration in Social Security Schemes

The commitment to extending social protection is reflected in the increasing number of self-employed individuals registering and actively contributing to schemes like the Self-Employed LINDUNG Scheme. As of December 31 last year, a total of 869,913 self-employed individuals were enrolled, with a significant portion, 299,674, specifically identified as gig workers and e-hailing service providers. This data indicates a growing awareness and utilisation of the available protection mechanisms by those in the gig economy.

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How will the Gig Workers Act 2025 improve welfare for gig workers?

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