What Does HRDC Mean and What Is It?
The Human Resource Development Corporation (HRDC) operates under the Ministry of Human Resources and is governed by the Pembangunan Sumber Manusia Berhad Act 2001. This corporation is responsible for managing the levy funds used to develop and upskill the Malaysian workforce through claimable training opportunities.
FYI: In April 2021, the Human Resource Development Fund (HRDF) rebranded to HRD Corp (HRDC) as an effort to extend their services to all industries. However, many people still use these terms interchangeably
Why Does It Matter for Employers
Despite contributing to their HRDC levy fund monthly, many employers end up not utilising these funds or are simply overwhelmed by the corporation’s bureaucratic framework – as a result, they miss out on valuable HRDC claimable training.
In this post, we’ll debunk some common misconceptions, breakdown the application process, and remind you of the important timelines and legal obligations.
Common Misconceptions Vs Reality
❌ “Only Large Companies Can Claim from the Fund”
Reality: Regardless of company size, only registered employers that actively contribute to their levy fund can apply for a claim
❌ “Any Training Programme Will Do”
Reality: No, only HRD Corp registered programmes are eligible. Plan ahead and ensure the selected programme is registered beforehand
❌ “Any Training Provider Will Do”
Reality: No, you must choose a HRDC certified training provider that’s authorised to deliver HRDC claimable courses. If you choose to proceed with non-approved providers, you won’t be eligible to claim any costs and place yourself at risk of scams
❌ “All Costs Are Fully Claimable”
Reality: Not necessarily, you may only be able to claim part of the costs. It’s advisable to check with your certified training provider or review the guidelines on HRD Corp requirements online to understand what’s claimable and what’s not
❌ “Costs Can Claimed at Anytime”
Reality: There is a timeline for employers to follow. For example, grants would have to be applied via the HRDC eTRiS portal prior to training – even if it’s a day before the actual date. After training, claims must be submitted within 6 months; otherwise, the amount remains in the levy account
❌“Levy Contributions Are a Waste of Money”
Reality: Think of your levy fund as a piggy bank. You contribute monthly and when your employees are due to upskill or attend a HRDC teambuilding programme, you can easily claim those expenses back
Benefits of Utilising Your HRDC Funds
- Improved return on investments (ROI)
Claiming your HRDC funds can make training programmes more cost-efficient and sustainable for employers in the long run
- Improved talent retention and productivity
Upskilling your talent creates opportunities for staff growth, improves morale and productivity, and build camaraderie and trust – ultimately reducing turnover rates
Application & Claim Process
1. Become a Registered Employer
- Registration is mandatory for companies that have ≥10 employees
- Registration is optional for companies that have 5-9 employee
The below steps should be done through the HRDC eTRiS portal
2. Levy Contribution
- 1% of wages monthly for ≥10 employees
- 5% of wages monthly for 5-9 employees
- Formula: Levy% x (Basic Salary + Fixed Allowances)
3. Grant Application
- Submit application via the portal
- Must include quotations, trainer profiles, course content, and training schedule
4. Claim Submission
- Submit supporting documents such as receipts, attendance records, training materials, certificates
- Training providers claim first for their part – trainer fees. Once approved, the employer is able to claim their part (This is part of the verification process from the training provider)
Important Timelines to Remember
- Grant: Must be applied before training (at least a day in advance)
- Training start date: Must begin within 6 months from grant approval
- Claims: Must be submitted within 6 months after training
- No grant = no claim, even if training was carried out and completed
- Levy forfeiture: Occurs when no claims are made within 2 years once the account has reached RM10,000
Legal Obligations
- Mandatory Registration under Section 13(1) of the PSMB Act 2001 (≥10 employees)
- Failure to Register: Fine not exceeding RM10,000 or 1 year imprisonment
- Registration but No Levy Contribution: Fine not exceeding RM20,000 or 2 years imprisonment or both
- Yearly interest of 10% for each day of payment default/delay
Ready to Claim?
Don’t let misconceptions stand in the way of helping your company and its employees reach their full potential.
Check if your company is maximising its levy fund, and browse our exciting HRDC team building packages set in various locations across Malaysia today!
