Employers FAQ | HRD Corp

FAQ

NEW EMPLOYER REGISTRATION

Beyond the fact that registration is compulsory for employers that fulfill the sector criteria under the law, employers should register with HRD Corp to enjoy a wide range of support for their employees’ professional development and skills enhancement initiatives.

Does my company need to register with HRD Corp??

The registration of employers is stipulated in the Pembangunan Sumber Manusia Berhad Act 2001 (PSMB Act 2001).

If your company employs a minimum of ten (10) or more Malaysian employees, it is compulsory for you to register with Human Resource Development Corporation (HRD Corp). If your company employs five (5) to nine (9) Malaysian employees, your registration with HRD Corp is optional. For more information, please visit the Expansion of PSMB Act 2001 webpage.

How do I know if my industry is covered under the PSMB Act 2001?

According to the Federal Government Gazette Pembangunan Sumber Manusia Berhad Amendment on First Schedule of PSMB Act 2001 Order 2021. These are the industries covered.
Click here to download.

What do I do after my registration application is approved?

Companies that have registered with HRD Corp are responsible to pay a monthly Human Resource Development (HRD) levy of 1% (mandatory category) or 0.5% (optional category) from the company’s monthly wages plus fixed allowances.

By paying the levy, you are eligible to receive assistance through HRD Corp’s levy or grant system to retrain or upskill your employees. Prior to sending your employees for training programmes, you have to apply for a training grant approval. Upon completion of the training programmes, you can claim a reimbursement for all expenses incurred. The amount allowed for reimbursement is subject to the approved amount or the actual expenses incurred, whichever is lower. Reimbursements can be made directly to the employer or the training provider, depending on the type of schemes selected.

Why must my company pay the HRD levy? What do I get in return?

HRD Corp, through the PSMB Act 2001 imposes the collection of HRD levy through legal authority on liable employers in Malaysia. In return, the employers will receive financial assistance from the HRD levy paid, for training and development of their local employees.

By actively utilising the levy contributions, the employers are able to:

Now I know my company is liable under PSMB Act, 2001, to pay the HRD Levy every month, how do I register?

You can choose to register online or through a manual submission (form and supporting documents).
If you choose to register online, please follow these steps:

Please fill in the online form together with the supporting document.
After fill in the online form, please click on ‘Submit’ button.
Click the button below to start register as an Employer.

CLICK HERE

If you choose to register by sending a hardcopy of the documents, please follow these steps:

Please fill in the related forms and attach together the supporting documents such as Form 9, Form 24, Form 49 and latest EPF statements and send them to:

Registration Unit – Customer Acquisition Department
Pembangunan Sumber Manusia Berhad,
Wisma HRD Corp, Jalan Beringin,
Damansara Heights, 50490, Kuala Lumpur

Are they any documents I need to submit along with the registration form?

Here are the documents you need to submit either via online registration or manual submission.

Jenis Pemunyaan Syarikat / Types of Ownership: Dokumen Sokongan / Supporting Document

Pemilik Tunggal / Sole Proprietorship – Lesen Perniagaan / Business License:

Penyata KWSP / EPF Statement
Profil Syarikat / Penyata Tahunan / Penyata Kewangan terkini atau apa-apa dokumen yang menerangkan aktiviti syarikat / Latest Company Profile / Annual Return / Financial Statement or any documents that state the activity of the company

Perkongsian / Partnership – Borang ROB / ROB Form:

Penyata KWSP / EPF Statement
Profil Syarikat / Penyata Tahunan / Penyata / Kewangan terkini atau apa-apa dokumen yang menerangkan aktiviti syarikat / Latest Company Profile / Annual Return /Financial Statement or any documents that state the activity of the company

Syarikat Sendirian Berhad / Private Limited Company:

Seksyen 14 / Section 14 atau / or SuperForm
Borang 9 / Form 9
Borang 13 / Form 13
Borang 24 / Form 24
Seksyen 17 / Section 17
Seksyen 28 / Section 28
Seksyen 78 / Section 78
Seksyen 58 / Section 58
Borang 49 / Form 49
Penyata KWSP / EPF Statement
Borang B / Form B (bagi pendaftaran IPTS sahaja / *for IPTS registration only)
Profil Syarikat / Penyata Tahunan / Penyata Kewangan terkini atau apa-apa dokumen yang menerangkan aktiviti syarikat / Latest Company Profile / Annual Return / Financial Statement or any documents that state the activity of the company

Syarikat Awam Berhad / Public Limited Company:

Seksyen 14 / Section 14 atau / or SuperForm
Borang 8 / Form 8
Seksyen 17 / Section 17
Seksyen 58 / Section 58
Borang 49 / Form 49
Penyata KWSP / EPF Statement
Profil Syarikat / Penyata Tahunan / Penyata Kewangan terkini atau apa-apa dokumen yang menerangkan aktiviti syarikat / Latest Company Profile / Annual Return / Financial Statement or any documents that state the activity of the company

Syarikat Asing / Foreign Company:

Seksyen 14 / Section 14 atau / or SuperForm
Borang 83 / Form 83
Borang 80A / Form 80A
Borang 79 / Form 79
Seksyen 17 / Section 17
Seksyen 562 (1) / Section 562 (1)
Penyata KWSP / EPF Statement
Profil Syarikat / Penyata Tahunan/Penyata Kewangan terkini atau apa-apa dokumen yang menerangkan aktiviti syarikat / Latest Company Profile / Annual Return / Financial Statement or any documents that state the activity of the company

Is the Human Resource Development (HRD) levy deducted from the employee’s wages?

No. Employers are not allowed to deduct from the employees’ wages under any circumstances for the payment of the levy.

How long does it take to process my registration application?

An employer registration process takes up to 30 days if all required documents are correct and complete.

How will I know whether my application is successful?

Successfully registered employers will receive the following e-mail notifications:

Registration approval email
User ID and password e-mail. The purpose of the user ID and password is to enable the authorised personnel from the registered employer to log into the HRD Corp system called eTRis (“Electronic Transformed Information System”)

Is the company director considered as an employee?

If the company director is paid a salary, he/she is regarded as an employee of the company, whereas a director who only accepts director fees is not considered an employee.

What is Form 1 (Registration of Employer)?

Form 1 is the form that must be filled by a company with more than 10 Malaysian employees and where the nature of the business of the company is covered under the PSMB Act 2001.

How to calculate the levy?

Levy= (Total wages or basic salaries + fixed allowances) x 1%
[Basic salary is the unpaid salary of any payment]
*Only applicable for company with 10 or more Malaysian employees

Levy= (Total wages or basic salaries + fixed allowances) x 0.5%
[Basic salary is the unpaid salary of any payment]
*Only applicable for company with 5-9 Malaysian employees

Is there any processing fees charged by HRD Corp when my company registers?

No fee is charged when processing the application for registration.

What is an employee?

Employee means any citizen of Malaysia who is employed for wages under a contract of service with an employer, but does not include any domestic servant.

Is it compulsory for an employer to register?

Section 13(1) of the PSMB Act 2001 stipulates that every employer who is covered under the Act is required to register with HRD Corp within such time and manner as may be prescribed.

If my company do not want to register, what is the consequence?

Any employer to whom this Act applies and chose not to register with HRD Corp shall on conviction be liable to a fine not exceeding RM10,000 or to imprisonment for a term not exceeding one year or to both (Section 13(2)).

If my company just registers with HRD Corp but does not pay the levy, what is the consequence?

Failure of payment before the stipulated time will result in;

Fine not exceeding RM20, 000.00 (Ringgit Malaysia Twenty Thousand) 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 or delay in payment.

What will happen if I ignore the letter of registration from HRD Corp assuming that I am not liable to the PSMB Act 2001?

If HRD Corp does not receive any response from employers within 30 days, employers can be compounded for up to RM2,000 under Section 4A of the Regulation of the Act. The eligibility of employers under the Act can only be decided by HRD Corp and not by the employers themselves. Employers are advised to fill in Form 1 to receive an official confirmation from HRD Corp on their eligibility.

If I fill in and submit Form 1, will I be registered automatically?

Only employers that fulfill the sector and subsector criteria meted out in the PSMB Act will be registered. If the employers’ sector is not covered under the Act or if they are not liable, then their Form 1 submission will be automatically rejected. The employer will receive a rejection letter. HRD Corp will not register any employers that are not liable under the PSMB Act 2001.

Can I just call or email HRD Corp to confirm my eligibility?

HRD Corp cannot confirm your eligibility through phone or email because we need to verify the supporting documents as well as the information filled in the form. Your eligibility can only be confirmed after Form 1 has been processed by HRD Corp.

How can I get more information on HRD Corp and the registration of employers?

Employers can visit our portal at www.hrdcorp.gov.my and click Employer for more information.

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 Resource 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.

HRD Corp has assumed a greater responsibility to reach out to the corporates; educating and motivating them to seek the benefits and value of HRD Corp training and development programmes and initiatives.

Who is eligible under the expansion of the Act?

Malaysian employers across all sectors except for Federal, State Government & Statutory Bodies and NGOs with a minimum of ten (10) local employees that conduct the following activities:-

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.

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 HRD Corp.

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 HRD Corp?

Employers can submit their Form 1 online via the HRD Corp portal at www.hrdcorp.gov.my > Employers > Click Here for Registration.

When is the effective date of the Expansion of the Act?

The Expansion of the Act comes into force on 1 March 2021.

What are the value propositions available for employers registered with HRD Corp?

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. HRD Corp 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 HRD Corp, 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 HRD Corp 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 HRD Corp?

Section 13(1) of the PSMB Act 2001 stipulates that every employer who is covered under the Act is required to register with HRD Corp 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 HRD Corp not later than 30 days.

Any employer who is convicted for not registering with HRD Corp 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).

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. HRD Corp is not allowed to register any employers that are not liable under the Act.

How does an eligible employer register their company with HRD Corp?

Employers covered under the PSMB Act 2001 are required to complete the Employer Registration Form (Form 1) and submit it online at www.hrdcorp.gov.my

The mentioned form should be returned/submitted together with Form 9 or other business registration license and company profile / annual return / financial audit report, and the latest employees provident fund (EPF) statement.

Can I just call or email to HRD Corp to confirm on my eligibility?

HRD Corp 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.

Do the employers with lesser than 10 employees are required to submit Form 1?

Yes. Employers are still required to submit the form with the relevant supporting documents to justify the current number of manpower if the employers receive a reminder letter or email from HRD Corp to submit Form 1.

How do I check my application status?

Approved / successfully registered employers will receive an email notification on the approval and a second email containing the following:

User ID and Password to access HRD Corp System (e-TRiS)
Invitation to attend the onboarding session

The onboarding session is a customised training programme to provide an overview and understanding for newly HRD Corp-registered employers on how to use the system for grant application, levy payment, claim submission and updating of employer’s information.

Who should I refer to for the re-submission of documents or to answer any queries from HRD Corp?

Our processing officer shall be in contact with you via email for any query. Alternatively, you may drop them an email to [email protected].

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 HRD Corp’s official website: www.hrdcorp.gov.my or you may contact HRD Corp’s toll-free Call Centre at 1800 88 4800.

CESSATION AND DEREGISTRATION OF AN EMPLOYER

Can an employer deregister with HRD Corp?

Section 16 (1) PSMB Act 2001, no employer who is registered with the Corporation shall be deregistered.

Section 16 (2) PSMB Act 2001, regardless of subsection (1), if the number of employees of an employer to whom this Act applies, decreases to below the minimum number for three consecutive months, the employer may submit an application to the Corporation for deregistration together with any relevant documents to prove such decrease.

If my company has ceased its operation, wound up, dormant, acquired by or merged with another company, what should I do?

Section 13 (3) PSMB Act 2001, where any person cease to be an employer under this Act, he shall within thirty days of such cessation notify the Corporation in such manner as may be prescribed

What is the period to apply for cessation or deregistration of a company?

Any cessation or deregistration application should be done by the employer within 30 days after the company stops operating.

Can a company halt its operation and deregister with HRD Corp?

No, deregistration only can be done if the company has changed its nature of business and the new business is not covered under the PSMB Act 2001 or the company has less than 10 Malaysian employees for 3 consecutive months.

When a company changes its origin business, and the new business is not covered under PSM Act 2001, can the company deregister with HRD Corp?

Yes, a company can deregister with HRD Corp if the new nature of business for the company is not covered under the PSMB Act 2001.

What will happen to the balance levy after a company deregisters or secedes from HRD Corp?

The balance levy will be transferred to the HRD Corp General Reserve.

ACQUISITION (LEVY TRANSFER) OF AN EMPLOYER

Can an employer transfer levy to another employer?

Section 20 (4) PSMB Act 2001 stated where an employer has acquired the interests of another employer registered under subsection 13(1) or 15(1), the first-mentioned employer shall be substituted for that other employer and shall be eligible to receive or continue to receive any financial assistance or other benefit provided under this Act, as the case may be, in respect of the employees, apprentices and trainees of the employer whose interests have been acquired.