About HRDF
The Human Resources Development Fund (HRDF) is administered by Pembangunan Sumber Manusia Berhad (PSMB), an Agency under the Ministry of Human Resources, via the Pembangunan Sumber Manusia Berhad Act, 2001.
The HRDF was established in 1993 with the aim of developing quality human capital and a world-class workforce in achieving a high income economy based on knowledge and innovation in the nation’s quest to attain the status of a developed country by the year 2020.
HRDF’s vision is to be the driving force in training and development of the workforce accompanied by its mission being to enhance the knowledge, skills and capabilities of the workforce through effective management of its fund. The objective of the HRDF is to encourage employers covered under the Pembangunan Sumber Manusia Berhad Act, 2001 to retrain and upgrade the skills of their employees, apprentices and trainees in line with their business needs and the development strategy of the country
The HRDF spearheads the up-skilling of Malaysian workforce by increasing the rate of financial assistance to 110% effective 1 January 2013. Employees with no formal education but have obtained the relevant knowledge, experience and expertise in the workplace will also be certified based on their competency levels (Sijil Kemahiran Malaysia – SKM, Diploma Kemahiran Malaysia – DKM or Diploma Lanjutan Kemahiran Malaysia – DLKM) under the Recognition of Prior Learning Scheme.
Commitment HRDF is committed to :
- Create a highly competent, well-trained, knowledgeable and skilled workforce by equipping the current and future workforce with the latest and specific skills through retraining, up-skilling, reskilling and cross-skilling programmes
- Enhance the human resources capabilities of Small and Medium Enterprises (SMEs)
- Increase Malaysia’s productivity and efficiency in strengthening Malaysia’s competitiveness in the global market
Functions - To assess and determine the types and extent of employees’, apprentices’ and trainees’ training and retraining in keeping pace with the human resources needs of industries
- To promote and stimulate manpower training
- To determine the terms and conditions under which any financial assistance or other benefits are to be given
Human Resources Development Levy
The Human Resources Development Levy is the mandatory levy payment imposed by the Government on specified groups of employers for the purpose of employee training and skills upgrading. Under the law, certain categories of employers are liable to pay a Human Resource Development levy for each working employee at the rate of 1.0% of the monthly wages of the employee. However, the Minister of Human Resources may, from time to time, by order published in the Gazette, reduce or increase the rate of the levy specified. The minister is also empowered to exempt fully or partially any of the employers from the payment of this levy.
Categories of Employers Covered Under the PSMB Act, 2001
i). Employers with fifty employees and above in the manufacturing sector (w.e.f. 1 January 1993);
ii). Employers with ten to forty-nine employees and a paid-up capital of RM2.5 million and above in the manufacturing sector (w.e.f. 1 January 1995);
iii). Employers with 10 employees and above in twenty-one selected industries in the services sector, namely, the hotel industry, tour operating business (in-bound tour only), shipping, air transport, telecommunication, computer services, advertising, postal & courier services and freight forwarding (w.e.f. 1 January 1995); private higher education, training and the energy sector (w.e.f. 17 February 2000); and direct selling, port services, engineering support and maintenance services, research and development, warehousing services, security services, private hospital services and hypermarkets, supermarkets and departmental stores – (w.e.f. 1 January 2005). For hypermarkets, supermarkets and departmental stores, only employers with 50 employees and above are required to register. Commercial land transport and railway transport services industry with 10 employees and above (w.e.f. 1 December 2007)
iv). Employers in the manufacturing sector with ten to forty-nine employees and a paid-up capital of less than RM2.5 million are given the option to register with PSMB (w.e.f. 2 August 1996).
Under Regulation 4(1) of the Pembangunan Sumber Manusia Berhad (Registration of Employers and Payment of Levy) Regulations 2001, employers have 30 days to register with PSMB from the date they are liable. Employers falling in any of the categories elaborated are still liable to register with PSMB under the Pembangunan Sumber Manusia Berhad Act, 2001. Those who have yet to register are advised to do so, failing which legal actions shall be taken against them.
Eligibility For Training Grant
Employers registered and / or incorporated in Malaysia who have registered with PSMB and pay the HRD levy immediately upon registration are eligible to apply for training grants (financial assistance) to defray all or a major portion of the “allowable costs” of training their employees. Training must be in the area of direct benefit to their business operations. Financial assistance is, therefore, not given to individuals who enroll and finance their own training programmes, whether partially or fully, and subsequently requested their employers for sponsorship. Neither is financial assistance given to employers who bear the cost of training after the successful completion of training by their employees.
Rate Of Financial Assistance
The HRDF is not a subsidy scheme for the retraining and skills upgrading of workers by employers. As the HRDF will provide financial assistance to defray all or a major portion of the “allowable costs”, all retraining and skills upgrading programmes undertaken by employers should be seen as cost-sharing efforts.
The rates of financial assistance with effect from 1 November 2008 are as follows:-
The HRDF is a scheme for retraining and skills upgrading of workers by employers and it is not a subsidy to employers. As the HRDF will provide financial assistance to defray all or a major portion of the “allowable costs”, all retraining and skills upgrading programmes undertaken by employers should be seen as cost-sharing efforts.
The rates of financial assistance with effect from 1 January 2013 are as follows:-
New Rates of Financial Assistance for Course Fees
| Skills Areas | Rate of Financial Assistance, Subject to the Maximum Allowable Costs | | 1. “Up-skilling” refers to training programmes that enable employees to gain higher qualification in the same field. | Will be eligible for financial assistance at the rate of 110%. | | 2. “Reskilling” refers to training programmes that enable employees to gain new qualification or learn different skill or field.
| Will be eligible for financial assistance at the rate of 110%. | | 3. “Functional skills” refers to training programmes that are related to employees’ job competency.
| Will be eligible for financial assistance at the rate of 110%. | | 4. “Technical skills” refers to competency training programmes that are related to a specific technical field.
| Will be eligible for financial assistance at the rate of 110%. | | 5. “Cross-skilling” refers to training programmes that allow employees to do different job skills on rotation basis between different organisational divisions.
| Will be eligible for financial assistance at the rate of 110%. | | 6. “Hard skills” refers to practical and specific teachable abilities or training programmes that can be defined and measured as required in a given context of task or activity. | Will be eligible for financial assistance at the rate of 110%. | | 7. “English Proficiency Enhancement” programme refers to training programmes that allow employees to improve/upgrade their English competency towards their work. | Will be eligible for financial assistance at the rate of 110% for employer to train up to the first 10% of their total employees per year. For additional employees, the course fee will be eligible for 90% only. This is to encourage employers to send more of their employees for other up-skilling, hard and technical-based training programmes. | | 8. “Soft skills”
refers to behavioural skill sets and personal attributes that enhance
employee’s social interactions and personality traits to interact with
other people that are applicable in the workplace such as teambuilding,
motivation, grooming, etc.
| Will be eligible for financial assistance at the rate of 90%. | | 9. Overseas Training | 50% (w.e.f. 1 January 2013 – the rate of financial assistance had been increased from 50% to 110% for retraining and skills upgrading in advanced technologies, new technologies, development of new products, research and development, engineering, marketing and strategic management).
| * Other allowable costs such as daily allowance, meal allowance or rental of training premise will remain at 100%. * HRDF reserves the right to determine the rate of financial assistance to any training programme not just based on the course title but shall be based on the complete course content. The rates of financial assistance which remain the same are as follows:
Rates of Financial Assistance for Course Fees
| Training Schemes | Rate of Financial Assistance, Subject to the Maximum Allowable Costs | | 1. Purchase of Training Equipment and Setting up of Training Room | 100% (subject to 20% of the amount of levy paid in the preceding year). | | 2. Purchase or Development of Computer-Aided Software | 85% - 100% (the rate of financial assistant is dependent on the skill areas). | | 3. Apprenticeship Scheme | 100% | | 4. Industrial Training Scheme | 100% (subject to a maximum of 20% of total levy balance at the time of application). | | 5. Computer Based Training | 100% (other costs such as delivery, installation fee and sales tax are not eligible). | | 6. Recognition Prior Learning Scheme (RPL) | 100% (will only cover the Certification Fees amounting to RM300 per person per level and it will be paid directly by PSMB to DSD or registered employers. | | 7. Future Workers Training Scheme | 100% (however if the number of trainees is less than five(5), employers are only eligible for internal trainer’s Allowance at the rate of RM5.00 per trainee per hour. |
Payment Of The HRD Levy
For the payment of the HRD levy, PSMB has appointed Public Bank Berhad and RHB Bank Berhad as its collection agents throughout the country. PSMB’s account numbers at the two banks are as follows:-
i). Public Bank Berhad - 3999060003
ii). RHB Bank Berhad - 21433437000066
Eligibility Of Employers
All employers registered with PSMB and have paid the Human Resources Development levy upon registration are eligible to apply for training grants, subject to the stipulated rate of financial assistance to defray the total or part of the training costs for employees
Application For Training Grants
Employers undertaking the retraining and skills upgrading of their employees through any mode of training can apply for training grants under any of the training schemes established by PSMB.
Training Schemes Under PSMB
To facilitate employers to send their employees for training, PSMB has introduces various training schemes as follows:-
* SBL Scheme
* SBL-Khas Scheme
* Annual Training Plan Scheme
- Juruplan Scheme
- SME Training Needs Analysis Consultancy Scheme
* PROLUS Scheme
* PERLA Scheme
* Joint Training Scheme
* Apprenticeship Scheme
* SME Training Partners (SMETAP) Scheme
* Computer-Based Training Scheme
* Information Technology and Computer-Aided Training Scheme
* Purchase of Training Equipment and Setting Up of Training Room Scheme
* English Language Programmes for Workers under the HRDF
* Industrial Training Scheme
* SME On-The-Job Training Scheme
* Recognition Prior Learning Scheme (RPL)
* Future Workers Training Scheme
Claims For Training Grants
Claims for training grants for completed programmes in the year should be submitted not later than 30 June of the following year. Financial assistance in respect of approved “allowable costs” will be reimbursed on a claimed basis. The amount reimbursed is subject to the approved amount or actual expenses borne by employers, whichever is the lesser and to the availability of funds in the employers’ accounts when claims are submitted to HRDF.
Human Resources Development Conference & Awards
PSMB also organizes an annual conference with the aim to keep HR professionals abreast with the latest HR challenges, human capital development tools and approaches to achieve organizational excellence. Apart from gaining information on products, services and business solutions, it also provides networking opportunities for employers, individuals and entrepreneurs.
In conjunction with this conference, the HRD awards were introduced and given to employers, both big and small and medium-sized employers who excelled in the development of human resources within their organizations. To recognize their achievements and training providers in the country, the Human Resources Development Awards, namely, the Human Resources Minister’s Awards and the Pembangunan Sumber Manusia Berhad Awards were introduced. The annual awards were divided into three categories i.e. big employers, small & medium sized employers and training providers.
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