HR Regulations – HRDF

1.Who must register with PSMB?
Section 13(1) of the PSMB Act 2001 stipulates that every employer who is covered under the Act is required to register with PSMB within such time and manner as may be prescribed.According to the First Schedule of PSMB Act 2001, definitions of industries covered are as follows:

  CLASS OF EMPLOYERSINDUSTRYSTATUS
Manufacturing Sector
Employers with fifty or more employeesManufacturing, that is, the making or processing of an article by labor or machine or both, including the transformation of parts or components into another article of a different nature or character or character by way of altering, blending, ornamenting, finishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, including the building of a ship or the assembly of parts of a ship.Required to register
Employers with ten or more but less than fifty employees and with a paid-up capital of two million five hundred thousand ringgit

(RM2,500,000) and above

Employers with ten or more but less than fifty employees and with a paid-up capital of less than two million five hundred thousand ringgit

(RM2,500,000)

May opt to be registered
Service Sector
Employers with ten or more employeesHotelRequired to register
Air transport
Tour operating business
Telecommunication
Freight forwarding
Shipping
Postal or courier
Advertising
Computer services
Energy
Training
Higher education
Direct selling
Port services
Engineering support & maintenance services
Research & development
Warehousing services
Security services
Private hospital services
Employers with fifty or more employeesHypermarket, supermarket and departmental store services

 

2What if an employer chose not to register with PSMB?

Any employer who is convicted for not registering with PSMB 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)).

3.What is human resources development levy?
Section 14(1) of PSMB Act 2001 stipulates that there shall be paid by every employer to whom the PSMB Act 2001 applies, a HRD levy in respect of each of his employees at the rate of one per centum (1%) of the monthly wages of the employee.Section 15(2) of PSMB Act 2001 stipulates that there shall be paid by employer a HRD levy in respect of each of his employees at the rate of 0.5 per centum of the monthly wages of the employee (applicable to employer who opts to be registered).An employer who is liable to pay the HRD levy shall pay those levies for the first and subsequent months’ wages commencing from the date the employer becomes liable as stated under the Regulation 7 of the Pembangunan SumberManusiaBerhad (Registration of Employers and Payment of Levy) Regulations 2001. The payment of the HRD levy is the responsibility of employers. Employers are not permitted to deduct the wages of employees under any circumstances for the payment of the levy.
4.When employer should make payment of their levy?
An employer who is liable to pay the HRD levy will have to pay not later than the last day of the month immediately following the month in respect of which the payment falls due, as states under the Regulation 7 of the Pembangunan SumberManusiaBerhad (Registration of Employers and Payment of Levy) Regulations, 2001.
5.What happens if an employer fails to pay levy within the prescribed period?
An employer who fails to pay his levy within the specified period will have to pay a yearly interest of 10% in respect of each day of default or delay in payment. Any payment for interests accrued must be made by using Form 2C. The quantum of interest to be paid will be determined by the Corporation.
6.How to make payment for HRD levy?
All payments of levy or arrears of levy or interests must be made through PSMB’s collection agents (Public Bank Berhad and RHB Bank Berhad) using Form 2A, 2B or 2C. For areas where there are no local Public Bank or RHB Bank branches, employers can send their levy payments directly to PSMB’s headquarters at Kuala Lumpur, butPSMB will not be responsible if cheques are lost in transit or if payments are delayed.PSMB’s account numbers at the two banks are as follows:

  • Public Bank Berhad – 3999060003
  • RHB Bank Berhad – 21433437000066
7.When should the employer use Form 2A, 2B and 2C?

  • Form 2A is used for payment of levy for the current month
  • Form 2B is used for payment of arrears in respect of payments for the previous months. Employers issuing single cheque for payment of arrears involving several months must use separate forms (Form 2B) for each month of arrears to be paid.
  • Form 2C is used for payment of interests on arrears of levy
8.Who is eligible to apply 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 attended by 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 requests 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.
9.Are foreign workers eligible for training grants?
To be eligible for training grants under the HRDF, trainees must be employees who are MALAYSIAN CITIZENS.
10.What is E-disbursement system?
E-disbursement system is the system where the amount of training grant approved for payment would be credited directly into employers’/training providers’ bank accounts. Before employers and training providers can receive training grants through the e-disbursement system, they are required to submit two forms i.e. PSMB/e-disbursement/1/08 and PSMB/e-disbursement/2/08.
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What is the definition of SMEs used by PSMB?

CategorySmallMedium
ManufacturingSales turnover from RM300,000 to less than RM15 million OR full time employees from 5 to less than 75Sales turnover from RM15 million to not exceeding RM50 million OR full time employees from 75 to not exceeding 200
ServiceSales turnover from RM300,000 to less than RM3 million OR full time employees from 5 to less than 30Sales turnover from RM3 million to not exceeding RM20 million OR full time employees from 30 to not exceeding 75
12.What is the new coverage under First Schedule of PSMB Act 2001?

CLASS OF EMPLOYERSINDUSTRY  STATUS
Mining and Quarrying Sectors
Employers with fifty or more employees
  1. Extraction of crude oil and gas
  2. Mining and quarrying
Required to register
Employers with ten or more but less than fifty employees and with a paid-up capital of two million five hundred thousand ringgit
(RM2,500,000) and above
Required to register
Employers with ten or more but less than fifty employees and with a paid-up capital of less than two million five hundred thousand ringgit
(RM2,500,000)
May opt to register
Service Sectors
Employers with ten or more employees
  1. Gas, steam and air-conditioning supply
  2. Water collection, treatment or disposal or material recovery activities
  3. Water treatment and supply
  4. Sewerage
  5. Early childhood education
  6. Tourism enterprise activities
  7. Event management services
  8. Motion picture, video and television programme production, sound recording and music publishing activities
  9. Online information service activities
  10. Building and landscape services
  11. Health support services
  12. Franchise
  13. Sale and repair of motor vehicles
  14. Private broadcasting services
  15. Driving school
  16. Veterinary services

Food and beverage services

Required to register