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Contributions to HRDF consolidated fund to be discontinued

Published:  |  Modified:

Effective Nov 15, the government will discontinue the 30 percent deduction from the levy contributed by registered employers to the Human Resources Development Fund (HRDF) consolidated Ffund.

Human Resources Minister M Kulasegaran, in making the announcement today, said the decision was made after deliberation with the Governance Oversight Committee (GOC), the HRDF board of directors and its management.

Speaking at the HRDF town hall with employer associations and registered employers in Kuala Lumpur, the minister said that the final payment towards the consolidated fund was for the month of October 2018.

Under the Pembangunan Sumber Manusia Berhad Act 2001, registered employers are required to contribute a one percent levy on their employee's monthly salary to the fund, with 30 percent of this channelled to the consolidated fund.

These funds are to train employees from small companies that cannot afford to contribute to HRDF and employees from the B40 category.

The minister said although employers were under the impression that their contributions to the consolidated fund could not be used to train non-contributors, they have to instead view it as a national service in helping to train a good local workforce.

“There are many enterprises which do not have sufficient funds to contribute to the HRDF. Their workforce has to be trained too,” he said.

The consolidated fund came into focus when it was revealed in June this year that a large amount of the monies had allegedly been misappropriated by its previous management.

Meanwhile, HRDF chief executive VE Elanjelian said HRDF was looking at strategic initiatives to maximise the remaining RM200 million in the consolidated fund for the benefit of employees, especially from SMEs.

“So, this fund will not be used for expensive programmes. It will be used to subsidise those employees whom otherwise will not have money to go for training or for small companies which do not have funds to train their workers,” he added.

- Bernama

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