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 Benefit from the HRDC Fund
Reality: Regardless of company size, employers, especially SMEs, benefit from this fund. As long as you are liable under the Act, are a registered employer, and have sufficient balance in your levy account, you are eligible to apply for claims.
❌ “Levy Contributions Are a Waste of Money”
Reality: Think of your levy fund as a piggy bank, where you contribute 1% (or 0.5%) monthly based on employee wages. The money accumulates in your levy account, waiting to be used for approved HRDC claimable courses like teambuilding, upskilling, and more
❌ “Any Course or Activity Can Be Covered”
Reality: No, only courses registered under HRDC are eligible for reimbursement. Plan ahead and ensure your selected programme is registered beforehand
❌ “There Are No Deadlines for Applications and Claims”
Reality: There are clear timelines for employers to follow:
- Grant application has to be done at least a day before training commences
- Once training is completed, submit a claim after the training provider has verified their part
- Claims must be submitted within 6 months of the training date
- You won’t be able to claim costs if you fail to follow this timeline
❌ “All Training Costs and Training Provider Fees Are Automatically Claimable”
Reality: Only training conducted by HRD Corp registered training providers is eligible for claims. Additionally, not all costs are covered, as claims must follow HRD Corp’s specific guidelines, and prior grant approval is required.
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 employees
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 HRDC eTRiS 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!
