Employers get grace period to register for HRDF

By FARA AISYAH / Pic By AFIF ABD HALIM

Employers have been given a grace period until June 30, 2018, to register and contribute to the Human Resources Development Fund (HRDF) or face legal action, said Manpower Minister M Kulasegaran.

As at April 2018, a total of 22,678 employers were registered, of the 45,750 that are liable to register based on the 2011 Census of Establishment.

Among the mandatory registration criteria for companies include employers with 10 Malaysian employees and above in the manufacturing, mining and quarrying, and 38 service sub-sectors as listed in the First Schedule of Pembangunan Sumber Manusia Bhd (PSMB) Act 2001.

“According to the law, they have already committed the offence. But going to court will be our last resort. So, employers who might have overlooked and not yet contributed are given time until the end of this month.

“If they fail to do so during the period, then we will take necessary actions by July 1,” he told reporters at a press conference in Kuala Lumpur yesterday.

Governed by the PSMB Act 2001 via Section 14(1), eligible employers are subject to compulsory registration and must pay a 1% HRD levy for each employee based on the monthly wages of the employee.

Any employer who contravenes the registration requirement under Section 13(1) under the same Act will be liable to a fine not exceeding RM10,000, or imprisonment for a term not exceeding one year or to both.

Kulasegaran also said Malaysian employers need to pull together their resources to reduce the dependency of foreign workers in this country, and train local workers to increase productivity.

All employers registered with HRDF will be able to leverage on the fund for up-skilling, re-skilling and multi-skilling through two approaches — enterprise training and strategic initiatives.

To date, there is a total of 3,650 registered training providers (TPs) with HRDF.

In 2017, a total of 2,452 (67.1%) TPs benefitted from the RM684 million financial assistance that was disbursed to employers.

For enterprise training, 70% of total employer levy is claimable through various training grants and schemes managed by HRDF, where employers are able to choose the training programmes that are suitable for their business needs.

As for strategic initiatives, 30% of the total employer levy is allocated towards a consolidated fund to sup- port strategic initiatives to achieve the 35% skilled workforce by 2020.

All employers registered with HRDF can access this fund, based on the available programmes as pro- posed to HRDF by their associations.

HRDF CEO Datuk CM Vignaesvaran Jeyandran said the organisation would love to train every local worker, but if the employers are not registered with HRDF, they cannot claim from the fund.

Some employers, however, are still reluctant to train their employees — although Vignaesvaran said the utilisation rate of the claimable fund has increased to 80%, to date.

“The two biggest concerns for employers regarding the training are the employees will be pitched by other companies after the training and they will ask for salary increments for increased productivity,” he said.