EXPANSION OF THE PEMBANGUNAN
SUMBER MANUSIA BERHAD ACT 2001
(EFFECTIVE FROM 1 MARCH 2021)
SUMBER MANUSIA BERHAD ACT 2001
(EFFECTIVE FROM 1 MARCH 2021)
Mandated by the Government of Malaysia in 11th Malaysia Plan (11MP) under Strategic Thrust 5 - Focus Area C: Strengthening the Lifelong Learning for Skills Enhancements where the access to Human Resource Development Fund (HRDF) is to be expanded to all industries.
In line with this, to improve its regulatory and funding support, HRDF is broadening access of the Human Resources Development Fund (HRDF) by expanding the coverage of the PSMB Act 2001 effective 1 March 2021. The 11MP has identified high-quality human capital to propel the country’s future economy and targets for 35% of the workforce to comprise skilled workers. The expansion is expected to increase the number of employees that are eligible for training under HRDF from the current 2.5 million in 2020 to 6.1 million from March 2021.
The expansion is a crucial step towards the overall development of Malaysia’s human capital; assisting towards increasing the number of skilled local workers that are responsive to business needs with the Ministry spearheading the mission. To realise these aspirations, the coverage of the PSMB Act 2001 has been expanded with effect from 1 March 2021 by streamlining its eligibility criterion to Malaysian employers across all industries as specified below.
In line with this, to improve its regulatory and funding support, HRDF is broadening access of the Human Resources Development Fund (HRDF) by expanding the coverage of the PSMB Act 2001 effective 1 March 2021. The 11MP has identified high-quality human capital to propel the country’s future economy and targets for 35% of the workforce to comprise skilled workers. The expansion is expected to increase the number of employees that are eligible for training under HRDF from the current 2.5 million in 2020 to 6.1 million from March 2021.
The expansion is a crucial step towards the overall development of Malaysia’s human capital; assisting towards increasing the number of skilled local workers that are responsive to business needs with the Ministry spearheading the mission. To realise these aspirations, the coverage of the PSMB Act 2001 has been expanded with effect from 1 March 2021 by streamlining its eligibility criterion to Malaysian employers across all industries as specified below.
Employers of the new sectors are given an exemption of HRD levy for three (3) months under Pembangunan Sumber Manusia Berhad Act 2001 from 1 March to 31 May 2021. The registration of HRDF employers under the new industries takes effect from 1 March 2021.
Find out more information via below Quick Links
List of Industries covered under the First Schedule of PSMB Act 2001
Are you one of the eligible employers stated under the Act? Kindly refer your eligibility and criterion in below First Schedule of PSMB Act 2001.
MANDATORY CATEGORY
Class of Employers
a. Employers with ten or more employees
Industry
- Agriculture and farming
- Livestock and fisheries
- Forestry and logging
- Mining and quarrying
- Manufacturing and production
- Trading, business and wholesale
- Construction
- Supply
- Property
- Culture, arts and entertainment
- Fashion and clothes
- Cosmetic
- Tourism and recreation
- Service
- Franchise
- Electricity
- Oil
- Gas and steam
- Water Sewerage
- Management of solid waste, liquid and gaseous and remedial
- Automotive
- Transportation
- Repair and maintenance
- Storage
- Delivery
- Food and beverages
- Information system
- Communication and multimedia
- Broadcasting and films
- Banking and finance
- Insurance and takaful
- Investment
- Co-operative societies
- Professional
- Science and technology
- Research and development
- Science and technicality
- Administration and support service
- Education
- Medical and health facilities
- Social welfare
- Administration of organisation membership
- Small and medium enterprises
- Household goods and services
- Sports
- Energy and natural resources
- Personal services
OPTIONAL CATEGORY
Class of Employers
a. Employer for industry specified in column (2) of Part 1 of the First Schedule with five to nine employees.
Industry
- Industry/sectors/activities listed under MANDATORY Category above.
b. Employer with five or more but less than five hundred thousand employees which is a non-governmental organisation and carrying out any activity in respect of—
- labour union;
- religious organisation;
- political organisation;
- nursing care facilities including nursing home for elderly, disable person orphanages, chemicals abuser or any welfare services; or
- social work without lodging.
NOT COVERED
- Federal Government, State Government, local council, and Statutory Body.
Checklist for registration of Employers under PSMB Act 2001
Type of Documents
1. Certificate of Incorporation / registration of companies/ partnership/ enterprise/ association and others
Example
Form 9/business license/Form 8/Section 14 Super form and other registration certificate.
2. Documents for no. of employees
EPF statement / SOCSO statement
3. Documents for employers activities
Company profile/annual report or other documents showing employers activities.
PSMB Act 2001 (Act 612)
Section 13(1) of the PSMB Act stipulates that employers liable under the Act are obligated to register. The section states that “Every employer to whom this Act applies shall register with the Corporation within such time and in such manner as may be prescribed”.
Action can be taken to employers under the Section 13(2) of the Act if employers contravene subsection (1) as above with a fine not exceeding ten thousand ringgit or imprisonment not exceeding 1 year or both.
Action can be taken to employers under the Section 13(2) of the Act if employers contravene subsection (1) as above with a fine not exceeding ten thousand ringgit or imprisonment not exceeding 1 year or both.
HRDF Registered Employers Journey
Find out on how to go about to register as our employer and all the procedures involved for your seamless and hassle-free journey.
HRDF Value Propositions
HRDF’s registered employers will get to enjoy various offerings in relevance of training and accordance with market needs amongst other benefits which include the opportunities to utilise contributions and special funds from the government.
The overall purpose of training fund is to raise the productivity, competitiveness and incomes of enterprises and individuals by providing them with needed skills, dedicated to developing productive work skills.
The overall purpose of training fund is to raise the productivity, competitiveness and incomes of enterprises and individuals by providing them with needed skills, dedicated to developing productive work skills.
The levy collected is an additional training budget for employers especially SMEs for purposes of promoting, developing and upgrading the skills of local workers, apprentices and trainees through training grants. These training costs can be claimed by employers after completion of the training of financial assistance via grant disbursements from the collection of Human Resource Development (HRD) levy from its registered employers.
HRDF registered companies are able to have 3% increase in productivity in terms of training under the moderation of HRDF. This is almost three (3) times more effective in contributing to the organisation productivity due to a very well established training ecosystem under HRDF in ensuring training has optimal returns of investment.
HRDF provides distinguished recognition to registered employers via HRDF awards to acknowledge the organisations’ efforts in developing human capital for the nation. Through these distinguished awards, employers would be able to attract and recruit more capable workers to join their organisations knowing that the organisations’ tendency to invest to upskill and reskill them.
Through extensive research and development as well as industry engagements, HRDF has 28 years wealth of data, knowledge and experience in understanding skills and training needs of the industries. With guidance of HRDF’s industry skills framework and various data analysis, the courses registered and moderated via HRDF are evaluated vigorously to ensure the training bring significant values to the industries.
Frequently Asked Questions (FAQs)
Check out the list of Frequently Asked Questions to address your enquiries.
What is the Pembangunan Sumber Manusia Berhad Act 2001 (PSMB Act 2001)?
The PSMB Act 2001 (“Akta PSMB 2001”) imposes the collection of a Human Resources Development (HRD) levy by way of legal authority on eligible employers in Malaysia which is used for training, developing and upgrading the skills of their local employees, apprentices and trainees through training grants.
What is the rationale for the expansion of the PSMB Act 2001?
The expansion of the PSMB Act 2001 is an initiative to increase more liable employers covered under the Act, assisting towards increasing the number of skilled workforce, with the Ministry spearheading the mission, that are flexible and responsive to business needs.
HRDF has assumed a greater responsibility to reach out to the corporates; educating and motivating them to seek the benefits and value of HRDF training and development programmes and initiatives.
HRDF has assumed a greater responsibility to reach out to the corporates; educating and motivating them to seek the benefits and value of HRDF training and development programmes and initiatives.
Who is eligible under the expansion of the Act?
Malaysian employers across all sectors except for Federal, statutory bodies & State Government and NGO with social and welfare activities with a minimum of ten (10) local employees.
Additionally, employers across all sectors (except for Federal, statutory bodies & State Government) with five (5) to nine (9) local employees will be given the option to register with HRDF.
Additionally, employers across all sectors (except for Federal, statutory bodies & State Government) with five (5) to nine (9) local employees will be given the option to register with HRDF.
What is the cost of payment by the eligible employers once they register with HRDF?
- Eligible employers under mandatory category are obliged to pay to HRDF a HRD levy on each local employee at the rate of one (1) per cent of the employee’s monthly wages;
- Employers with five (5) to nine (9) local employees under optional category, the HRD levy are at the rate of 0.5 per cent of the local employee’s monthly wages.
How to calculate levy?
Levy payment is applicable for Malaysian employees only. The calculation is as follows:
1% Levy Contribution (> 10 employees)
Levy Payment (RM) =
(Total wages / basic salaries + fixed allowance) x 1%
[Basic salary is the unpaid salary of any payment]
Levy Payment (RM) =
(Total wages / basic salaries + fixed allowance) x 1%
[Basic salary is the unpaid salary of any payment]
0.5% Levy Contribution (< 10 employees)
Levy Payment (RM) =
(Total wages / basic salaries + fixed allowance) x 0.5%
[Basic salary is the unpaid salary of any payment]
Levy Payment (RM) =
(Total wages / basic salaries + fixed allowance) x 0.5%
[Basic salary is the unpaid salary of any payment]
What happens if employer fails to make a payment?
Section 13(1) of the PSMB Act Failure in making the levy payment before the stipulated timeline (by every 15th of the month) will result in:
- Fine not exceeding RM20,000 (Ringgit Malaysia) or imprisonment for a term not exceeding two (2) years or both (on conviction).
- Yearly interest of 10% (per cent) in respect of each day of default / delay in payment.
How do I check my eligibility as an employer to register with HRDF?
Employers can submit online Form 1 via HRDF portal at www.hrdf.com.my> Register Here> Employer > Liable (Form 1).
When is the effective date of the expansion of the Act?
The Expansion of the Act will come into effect in March 2021.
What are the value propositions available for employers registered with HRDF?
Registered employers who have been actively utilising their levy contributions in retraining and skills upgrading their employees will reap the following benefits:
- Equipping their local employees with specific and up-to-date skills through Training Grant applications which in return increases an employer’s productivity and value-adds to Company’s operations and economic performance. HRDF registered employers can apply for various Training Grants and these are - Training Assistance Scheme (SBL), Special Training Assistance Scheme (SBL-Khas) and Industrial Training Scheme. All training fees are debited directly through the employer’s levy account.
- Having a multi-skilled workforce in meeting the local, regional and global market demands. Suffice to say, by registering with HRDF, employers will get the benefits in the human capital development of their employees in a systematic manner. These include access to special funds from the Government of Malaysia (which include but is not limited to training incentives to Small Medium Enterprises (SMEs) employers and the Apprenticeship Training Fund Scheme under minimum wage) distributed to HRDF from time to time.
- Access to continuous assistance in terms of guidance, schemes and initiatives.
- Complimentary consultations from qualified consultants on all aspect of human resources’ management.
Is it mandatory for eligible employers to register with HRDF?
Section 13(1) of the PSMB Act 2001 stipulates that every employer who is covered under the Act is required to register with HRDF within such time and manner as may be prescribed.
Regulation 4(1) of Pembangunan Sumber Manusia Berhad (Registration of Employers and Payment of Levy (Amendment) Regulation states that an employer to whom the Act applies on the date of coming into operation of these regulations shall submit Form 1 of the Schedule to HRDF not later than 30 days.
Any liable employer who is convicted for not registering with HRDF may be fined up to an amount not exceeding RM10,000 or an imprisonment for a period not exceeding one year or both (Section 13 (2) of PSMB Act 2001).
Regulation 4(1) of Pembangunan Sumber Manusia Berhad (Registration of Employers and Payment of Levy (Amendment) Regulation states that an employer to whom the Act applies on the date of coming into operation of these regulations shall submit Form 1 of the Schedule to HRDF not later than 30 days.
Any liable employer who is convicted for not registering with HRDF may be fined up to an amount not exceeding RM10,000 or an imprisonment for a period not exceeding one year or both (Section 13 (2) of PSMB Act 2001).
Is the company’s director considered as an employee?
If the company’s director is paid by the company for monthly salary, then he/she is considered as an employee and must be counted in the levy payment. Whereas, a director who only receives director fees is not considered as an employee and shall be excluded from the levy payment.
If I fill in and submit Form 1, will I be registered automatically?
Only liable employers will be registered. If the employers’ sector is not covered under the Act or they are not liable, then the application of Form 1 will be automatically rejected and the employer will receive a rejection letter. HRDF is not allowed to register any employers that are not liable under the Act.
How does an eligible employer register their company with HRDF?
- Employers covered under the PSMB Act 2001 are required to complete the Employer Registration Form (Form 1) through online application available at www.hrdf.com.my.
- The mentioned form should be returned/submitted together with FORM 9 or other business registration license and COMPANY PROFILE / ANNUAL REPORT / FINANCIAL AUDIT REPORT, AND LATEST EMPLOYEES PROVIDENT FUND (EPF) STATEMENT to the address listed on the back cover of this book.
Can I just call or email to HRDF to confirm on my eligibility?
HRDF cannot confirm on your eligibility via phone call or email. We require supporting documents such as Form 9 / Section 17 or Section 14 / latest EPF statement / company profile / audited annual report to verify the registration eligibility.
Confirmation will be made upon completion of registration process. List of industry / services covered under the act is listed as per the First Schedule.
Confirmation will be made upon completion of registration process. List of industry / services covered under the act is listed as per the First Schedule.
How do I check my application status?
Approved / successfully registered employers will receive an email notification on the approval together with:
- Free On-Boarding Session.
- User ID and Password to access HRDF System (e-TRiS)
On-Boarding Programme is a customised training to give an overview and understanding for newly HRDF registered employers on how to use the system for grant application, levy payment, claim submission and updating employer’s information.
What is the duration of the registration process?
Complete application will be processed within seven (7) working days
To whom should I refer for the re-submission of document / to answer query from HRDF?
Processing officer shall be in contact with you via email for any query or you may drop an email to employersupport@hrdf.com.my.
How do I obtain more information and/or clarifications on the expansion of the PSMB Act 2001?
The relevant information about the expansion of the Act can be retrieved from HRDF’s official website: www.hrdf.com.my or you may contact HRDF’s toll-free Call Centre at 1800 88 4800.
Do you need assistance from our officers?
Fill up our contact form or contact us at:
Email: support@hrdf.com.my
Hotline: 1800-88-4800
Email: support@hrdf.com.my
Hotline: 1800-88-4800
