HRDF will get right down to business, says Kulasegaran

KUALA LUMPUR: The Human Resources Development Fund (HRDF) will get back to its core business of training to upskill the workforce to instil confidence of employers.

Human Resources Minister M. Kulasegaran said the HRDF board and management were aware of what needs to be looked into with “immediate urgency”.

“In fact, several key actions have already been put in place such as the appointment of a new chief executive in July, resignation of seven board members and the suspension of several initiatives under the 30% consolidated fund.

“Others included restructuring the fund’s organisation and people placement, and the need for due diligence before any payment is made,” he said.

During a townhall meeting with representatives of employer associations and HRDF registered employers yesterday, Kulasegaran also announced the discontinuation of the 30% consolidated fund levy deduction of registered employers, effective Thursday.

“Most employers lamented the lack of transparency of the consolidated fund.

“So, after deliberation with the Governance Oversight Committee (GOC), the HRDF board of directors and its management, we are discontinuing the levy deduction on registered employers.

“The final payment towards the consolidated fund was up to last month,” he said.

Kulasegaran, who initiated a five-member independent GOC to review and probe the allegations, had earlier revealed that there were elements of fraud in the use of the fund by some management personnel.

“These went on in the past. But it has come an end,” he said, adding that the balance of funds would go towards human capital initiatives as listed in the Industrial Revolution 4.0 blueprint, to be announced to employers later.

Of the 1% HRDF levy deduction from companies with more than 10 employees and 0.5% from businesses with five to nine employees, 70% is claimable by companies for training purposes, while 30% is held under a consolidated fund for common use, regardless of contribution, for specific training programmes decided by HRDF.

The levy covers 63 sub-sectors in the services, manufacturing, including mining and quarry industries.

With the cessation, the monthly HRDF levy deduction, which was initiated in 2016 and governed by the Pembangunan Sumber Manusia Berhad Act 2001, would still be applicable on registered employers, allowing companies more funds to train their workforce.

Kulasegaran also noted that some employers were under the impression that their contributions would not be used to train non-contributors.

However, he said all employers have to play their part in training a good local workforce.

“There are many small enterprises with insufficient fund to contribute to the HRDF, and their workforce has to be trained too,” he said.