Employers who default on HDRF given grace period
KUALA LUMPUR: Employers, who have failed to register as levy contributors or have defaulted payment to the Human Resource Development Fund (HRDF), have until July 1 to comply with the law.
Human Resources Minister M Kulasegaran gave the errant employers a grace period until June 30.
They are aware that they have committed an offence under Section 13(1) of the Pembangunan Sumber Manusia Berhad Act 2001, which carries a maximum fine of RM10,000 or maximum one-year jail term or both, he said.
"According to census, there are a total of 45,750 companies liable to register with HRDF but only 23,072 companies, that is about 50% has registered and have been paying," Kulasegaran told a press conference after a brief meeting with the HRDF board of directors at its headquarters.
"Under the law, employers are required to pay 1% of the worker's monthly salary to enable training and skills upgrading of the Malaysian workforce."
He said it is mandatory for companies with 10 workers and above to register with HRDF while it is optional for those with less than 10 workers.
"This is a very important organisation. In South Korea and Japan they play a pivotal role but in Malaysia, although HRDF has been set up since 1993 until now there is no active participation from employers," he said.
"I urge all employers to be registered as levy contributors. I have instructed my ministry (to do what) they have not done this until now. The ministry will not hesitate to take to court those who have not registered and those who have defaulted."
Kulasegaran said he does not want to penalise the non-compliant employers straightaway and take them to court as the ministry is "business-friendly" but they must address this issue within this month.
He also urged employers or businesses with financial difficulties to engage HRDF to resolve the matter.
When asked why the ministry has not enforced this all these years despite having the law, HRDF CEO Datuk C M Vignaesvaran Jeyandran said it has been taking a "soft approach" all these while but after the grace period it will be stricter with employers. — Bernama