On 1 March 2021, Malaysia’s Human Resources Development Fund (HRDF) expanded the coverage of the Pembangunan Sumber Manusia Berhad Act 2001 (PSMB Act 2001) to include all industries.

This expansion is a crucial step towards the overall development of Malaysia’s human capital and will help towards increasing the number of skilled local workers that are responsive to business needs. All industries are now covered under the HRDF’s training except for Federal and State Government.

Employer Impact

Employers who were previously not eligible to register with HRDF or had their application rejected as it was not subject to the Act prior to 1 March 2021, will now potentially be subject to the PSMB Act and liable to pay a HRDF levy.

Potentially liable employers will have received a letter from the HRDF and must respond by completing Form 1 through the HRDF website, this must be completed within 30 days from the date stated on the letter. Failure to comply within the one-month period is considered an offence under the Act.

Eligibility

An employer can check if they are eligible by referring to this link and submitting Form 1 electronically, only liable employers will be registered. If the employers’ sector is not covered or they are not liable, the application will be automatically rejected and the employer will receive a rejection letter.

Employers of the new sectors are given an exemption of HRDF levy for three months from 1 March 2021 to 31 May 2021 and levy payment will begin from 1 June 2021.

Penalty

If an employer does not register with HRDF and is convicted, they may be fined up to RM10,000 or face imprisonment for a period of less than one year, some may even face both penalties.

For more information on Malaysia’s business rules and regulations, browse our Global Insight Guide to Malaysia.

For more up to date information on relevant industry news, please visit the activpayroll latest news page.

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