The Pembangunan Sumber Manusia Berhad Act 2001 ("PSMB Act") has recently been amended to expand the categories of employers required to pay a levy to the Human Resources Development Fund ("HRDF"). The amendment was effected pursuant to the Pembangunan Sumber Manusia (Amendment of First Schedule) Order 2021 which replaces the First Schedule of the PSMB Act, which sets out the industries which are subject to the levy. The new First Schedule ("First Schedule") lists out the following 48 industries:
Under the recent amendments:
- Employers who employ a minimum of 10 Malaysian employees in any of the industries stated in the First Schedule must register with the Pembangunan Sumber Manusia Berhad ("Corporation") and pay a levy in respect of each employee at the rate of 1% of the monthly wages of its employees;
- Employers who employ between five to nine employees in any of the industries stated the First Schedule may opt to register with the Corporation, and if so, will be required to pay a levy in respect of each employee at the rate of 0.5% of the monthly wages of its employees;
- Employers with five or more or but less than 500,000 employees which is a non-governmental organisation carrying out activities in respect of a labour union, religious organisation, political organisation, nursing care facilities (including home for elderly person, person with disabilities, orphanage, chemical abuser or any welfare services) or social work without lodging may also opt to register with the Corporation, and if so, will be required to pay a levy in respect of each employee at the rate of 0.5% of the monthly wages of its employees.
An employer who is required, but fails to register itself with the Corporation, commits an offence and upon conviction, shall be liable to a fine not exceeding RM10,000 or to imprisonment for a term not exceeding one year or to both.
An employer who fails to pay any levy due under the PSMB Act commits an offence and shall on conviction be liable to a fine not exceeding RM20,000 or to imprisonment for a term not exceeding two years or to both. However, pursuant to the Pembangunan Sumber Manusia Berhad (Exemption of Levy) Order 2021, certain employers under the First Schedule of the PSMB Act are exempted from paying the levy for a period of three months from 1 March 2021 to 31 May 2021.
An employer who is required to register itself may do so by submitting Form 1 together with the following documents to the Corporation:
- Certificate of Incorporation of Company;
- Certificate of Incorporation on Change of Name of Company (if any);
- Return of Allotment of Shares;
- Notification of Change in the Register of Directors, Managers and Secretaries;
- EPF Statement; and
- latest Company Profile / Annual Return / Financial Statement, or any documents that state the activity of the company.
The registration of employers with the Corporation takes effect from 1 March 2021. The due date for registration has been extended from 31 March 2021 to 30 April 2021.
The Corporation is encouraging all employers to voluntarily register themselves with the Corporation for an assessment on whether their businesses are impacted by the recent amendments and/or whether they have an obligation to pay the levy stipulated under the PSMB Act.
Originally published 21 April 2021
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