HRD Corp Compliance: Employer Levy and Deregistration Criteria When Downsizing
In today’s volatile economic landscape, downsizing is often an unavoidable reality. For Malaysian employers registered under HRD Corp, understanding compliance during such transitions is not just prudent—it’s imperative.
Even when headcount dips below 10, compulsory category employers must continue contributing the statutory 1% levy. This obligation remains until deregistration is formally approved, regardless of manpower strength.
Under Section 16(2) of the PSMB Act 2001, employers with fewer than 10 employees for three consecutive months may apply for deregistration. The application must include Form 4A and the past three months’ EPF statements. Crucially, the employer must ensure there are no outstanding levy payments or post-application training activities.
Submissions may be made through the E-TRiS System or by sending the completed application directly to HRD Corp via email. Once approved, any remaining levy is not refunded but channeled into the HRD Corp General Reserve.
Diligent adherence to these criteria not only ensures regulatory alignment but also protects businesses from potential penalties. Strategic foresight and timely action can ease the compliance burden during organizational restructuring.
