The HRDF or Human Resource Development Fund is an organization in Malaysia that raises fund from the employers of manufacturing and service sectors under recommended categories. The aim for raising this fud is to provide skill training and certifies workforce in Malaysia. It was established in 1993, under the Human Resources Development Act 1992. It is currently known as PSMB ACT 2001, or Pembangunan Sumber Manusia Berhad ACT 2001. This particular organization lies under the Ministry of Human Resource in Malaysia.
This HRDF exclusively put their focus on skilling up human workforce and provides qualified training courses to upgrade skilled workforce in this nation. The ultimate goal is to enforce workers and getting them ready for future industrial needs. Human resource development fund (HRDF) in Malaysia is made compulsory by the government. It is therefore mandatory to be under this program when the company falls under the category set by the government.
By now we must have an idea about HRDF fund. However, through this article we will gather in-depth knowledge idea about HRDF levy, advantages of HRDF, eligibility criteria for this particular fund program, various training schemes this HRDF program includes and finally the application process for HRDF fund program.
Defining HRD levy?
The HRDF accommodates a mandatory levy called HRD levy according to Section 14(1), of PSBM Act, 2001. The levy for all employers is implacable under PSBM Act 2001. The defines that employers are liable to pay a 0.5% to 1% levy behalf of each employee working in the company, on a monthly basis. From the wages of each employee.
Advantages of HRDF in Malaysia
The HRD fund scheme has been introduced to ensure welfare and skill building of employees. The fund eventually bears costs of their skill development by introducing them with various professional skill development trainings. Wherever applicable, an employer of the company has to pay an amount at a rate of 0.5% to 1% foreach employee working in the company. This will eventually be used as grants for various training courses and workshops for their employees. In summary, this particular fund covers an employee’s training expanses.
Under HRDF many skill programs are also included for the benefit of employees. The aim of HRDF or locally called PSMB is to provide resource rich knowledge sharing and thereafter create a skill development environment for employees to build skilled and resourceful employee database in Malaysia. Human Resource Development fund has two separate criteria
- HRD levy
- Government Special Fund
Both categories grant allowances for company employers to pursue HRDF schemes to encourage building skilled workforce in Malaysia.
Who are eligible for Human Resource Development Fund?
According to the Section 13(1) of PSBM Act 2001, every employer under HRDM enlisted companies are eligible for this this levy program. Every employer has to register with PSMB. If an employer of a company in Malaysia try to Skip it or ignore the monthly grant submission, he/she will be entitled to pay a fine of RM 10,000. Disobeying this levy can also lead an employer to an imprisonment of up to a year under Section 13 (2).
The HRDF levy however is not the same for all company employers. The rate of levy depends on the work heads a company consist of. Following are the two eligibility criteria for HRDF levy in Malaysia:
- If the employee count is equal to or more then 10, then the employer of the company must register and pay 1% rate of worker’s wages.
- If the employee count is less than 10, that is 1 to 9, then the employer has an option to register and pay at 0.5% rate of HRD levy in Malaysia.
Application process for HRDF training grant
Here are the step by step application process for HRDF application for the convenience of company employers in Malaysia:
Step 1: Apply online through e-TRIS system or Electronic Transformed Information System. This online service is relatively new from HRDF which makes the registration and monthly fund transection process with PSMB more convenient.
For this process following documents are required:
- Invoice paper
- Detail training plan and schedule
- Profile documents of the specific training program
Step 2: Once applied successfully online, the applicant has to wait for the approval.
Step 3: Once approved, company employer has to claim for the grant. An employer has to come up with following documents for successful claim:
- Receipt & invoice needed for training fees
- Any other receipt & invoice for company transportation and utilities
How to claim HRDF?
To check the current status and report of the claim, an applicant has to go through following steps:
- Visit HRDF Portal and login to the e-TRiS system
- Click on the ‘Applications’ option.
- Among the menu shown, click on ‘Claim’ for seeing the current claim status
- Select ‘Search / Withdraw Claims’ for getting claim report for checking claim status.
Or, Select ‘Daily Claim Listing for Employers’ for getting claim report.
List of Services sectors that falls under PSBM Act, 2001
We have come up with service sectors which have been enlisted for the Human Resource Development fund program in Malaysia. Following are the business sectors under this particular scheme:
- Production of Motion Picture, Video and Television Program, Sound Recording and Music Publishing
- Hypermarket, Supermarket and Departmental Store Services
- Engineering Support and Maintenance Services
- Management and Material Recovery Services
- Gas, Steam and Air-Conditioning Supply
- Transport & Railway Transport Services
- Repairing and sales of Motor Vehicles
- Building and Landscape Services
- Tourism Enterprise (outbound)
- Petroleum and Gas Extraction
- Mineral and Stone Quarrying
- Water Treatment and Supply
- Event Management Services
- Private Broadcasting Service
- Food and Beverage Services
- Research and Development
- Research and Development
- Early Childhood Education
- Private Hospital Services
- Travel Agency (inbound)
- Health Support Services
- Warehousing Services
- Manufacturing sector
- Information Service
- Veterinary Services
- Freight Forwarding
- Computer Services
- Commercial Land
- Higher Education
- Postal or Courier
- Security Services
- Driving School
- Mining Sector
- Port Services
- Direct Selling
- Air transport
Various initiative schemes under HRDF program
PSBM grants various professional skill buildup schemes that employer of an enlisted company can undertake for his/her company employees’ skill buildup. Following are several recommended initiative schemes offered to the employer:
- Industry certification
- Sistem Latihan Dual Nasional
- Recognition of Prior Experimental Learning
- Graduate Enhancement programme for Employability
- Develop Your Management Skills
PSBM scheme of Malaysia or HRDF in Malaysia also grants multiple schemes devised for employers: Some of those schemes are:
- Future Workers Training (FWT)
- Recognition of Prior Learning (RPL)
- Computer Based Training (CBT)
- Industrial Training Schemes (ITS)
- Information Technology (IT)
- On Job Training (OJT)
All these training programs under HRDF in Malaysia demands their own respective application requisitions. Each individual training possesses different objectives and training contexts. Therefore, to keep things clean and understandable, it is wise to be connected to a business consultant or business expert. It will provide an in-depth advice about various schemes and programs under the concern of Human resource development fund or PSBM grant in Malaysia.
What is HRDF?
HRDF also called Human Resource Development Fund is an organization governed under the ministry of Human Resource in Malaysia that was established in 1993 under Pembangunan Sumber Manusia Berhad Act 2001 (PSMB ACT 2001).
What are the steps of HRDF claim in Malaysia?
Following are the HRDF claiming steps in Malaysia:
- Apply online through e-TRIS system
- Get the approvals
- Claim for the grant with required documents
Is HRDF Mandatory in Malaysia?
Yes, as long as you have 10 or more than 10 employees working in your company you have to pay 1% levy. However, if the employee number is less than 10, the levy rate is 0.5%.
How can I calculate HRDF rate?
We use following formula for calculating the HRDF rate:
HRDF levy = HRDF Levy% x (Basic Salary + Fixed Allowances).