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Human Resources Development Fund (HRDF): Upgrade Your Employee's Skills

  • July 15, 2023
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Meet the Author : Mr. Bharani Kumar

Bharani Kumar Depuru is a well known IT personality from Hyderabad. He is the Founder and Director of Innodatatics Pvt Ltd and 360DigiTMG. Bharani Kumar is an IIT and ISB alumni with more than 18+ years of experience, he held prominent positions in the IT elites like HSBC, ITC Infotech, Infosys, and Deloitte. He is a prevalent IT consultant specializing in Industrial Revolution 4.0 implementation, Data Analytics practice setup, Artificial Intelligence, Big Data Analytics, Industrial IoT, Business Intelligence and Business Management. Bharani Kumar is also the chief trainer at 360DigiTMG with more than Ten years of experience and has been making the IT transition journey easy for his students. 360DigiTMG is at the forefront of delivering quality education, thereby bridging the gap between academia and industry.

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The Details of HRDF and PSMB Act, 2001:

The Human Resource Development Fund was established under the PSMB Act of 2001. The HRDF was included in the PSMB or Pembangunan Sumber Manusia Berhad Act as long as they met specific legal standards.

It is a money-making strategy. These monies are derived from employer-paid levies for human resource development. These businesses are from the manufacturing and service industries.

This list covers both mandatory and voluntary registrations that are listed in the Pembangunan Sumber Manusia Berhad Act of 2001's First Schedule. Malaysian authorities founded the HRDF.

These funds' primary goal is to raise money; with this money, a skilled and well-run working class or workforce is formed. As a result, Malaysia's economy would benefit.

An enhanced economy would create and instill in the minds of the people knowledge, serenity, contentment, and security. This is crucial for a developing nation like ours. Consequently, the creation of these laws and funds was a significant step in the direction of a better and more secure future.

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Consolidation of The Act:

Section (1) in the PSMB Act 2001 is for any employer covered under the statements of this act. It states that every such employer should register with PSMB along the lines of the prescribed time and method.

Those who have not registered under this act would be punished. There is a penalty that cannot exceed the amount of RM10, 000. Also, on non-payment of penalties, the person might be imprisoned for a tenure of one year.

The industries and sectors under this act include:

  • Services Sector:

    Hotels, storage facilities, shipping, goods forwarding, postal and courier services, shipping, advertising, computer services, instruction in energy, higher education, commercial real estate, direct selling, engineering support, port services, research and development, etc.

  • Manufacturing Sector:

    Manufacture of a product by use of human labour or any machine. It includes the act of transformation of multiple components into a different product. This product can be made by evolving another already made product.

    The main objective is to make it usable, transportable, and deliverable, including shipbuilding or assembling parts.

  • Mining Sector:

    This industry includes the extraction of oil and gas as well as the mining and quarrying of stone and minerals.

The Human Resource Development Levy and Contributions:

Section 14 (1) of the Act of 2001 has expressed to every employer that this act applies to pay an HRDS levy for each of his employees. The levy rate is one percent (1%) of the monthly salary of each employee.

Under Section 15 (2), the employer who has opted out has to pay an HRD levy of 0.5 percent (0.5%) of the salary that his employee receives monthly. An example of HRDF Levy calculation is as follows:

If you are liable to pay 1% HRDF levy and the employee who works for you earns RM3500 along with the added allowance of RM 300, the calculation for the Human Resource Development Fund levy would be as follows:

(RM3, 500 + RM300) * 1% = RM40.

According to Regulation 7 of the Pembangunan Sumber Manusia Berhad (Registration of Employers and Payment of Levy) Regulations 2001, an employer is required to pay for the first month an employee receives his monthly income until the final month from the date the employer becomes subject to this act.

Under no circumstances may these donations be subtracted from the employees' salary. The employer is responsible for managing them on his own, and it is his responsibility to make his contribution, not that of the employee.

HRDF Certified Trainee:

An individual trainer is a professional trainer with a certificate of completion from the TTT or the Train the Trainer certification program. After the candidate has completed his or her TTT certification, he or she gets the status of an individual trainer.

He or she now becomes an employee under the HRDF. Any training by him or her shall be claimed by the HRDF registered employer.

The program not only depends upon the facilities provided during the training. It is more dependable on the quality and knowledge of the trainers who have been conducting the training.

To successfully ensure that the people enrolled as trainers are knowledgeable and provide high-quality training, they are subjected to the PSMB TTT certification program. But this process can be opted out of if the candidate can match the qualifications listed in the Training Provider Circular 4/2009.

Important Aspects of the Certification Process:

Possessing the TTT certificate attests to one's expertise and demonstrates their depth of practical experience. This ensures that you possess the necessary skills to have an immediate and profound influence on the workforce around you.

When considering a certification procedure, three key considerations must be made: the duration of the certification, the cost, and the calibre of the trainer.

Five days of in-person, in-depth instruction are required for the PSMB Train the Trainer (TTT) certification procedure. Throughout the whole vetting process, careful evaluation and attention are exercised. Within these five days, all assignments and responsibilities must be completed.

The Vision:

The vision of the Human Resource Development Fund is to improve the economy of Malaysia. It seeks to provide financial protection and stability to the citizens of the country. It seeks to achieve this by improving the workforce in the significant sectors stated in the PSMB Act of 2001.

The HRDF has set up guidelines for trainers and trainees to develop a sound working-class structure whose welfare is protected by their employers. This makes it very convenient and provides improved quality to the whole economic architecture.

All of this is being done to support Malaysia's transition towards a high-income economy with contented residents and a productive workforce. The HRDF has a strong sense of pride in its members.

The statement that a nation's population are its finest resource and are in charge of maintaining its reputation is accurate.

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