Tax Relief And Financial Aid For Employers Supporting Apprenticeship Programmes

KUALA LUMPUR, Dec 5 (Bernama) -- Tax reductions and assistance schemes via the Human Resources Development Corporation (HRD Corp) have been introduced to alleviate financial implications and competitive pressures on employers paying minimum wages to contract apprentices.

Deputy Human Resources Minister Datuk Seri Abdul Rahman Mohamad said that to ensure apprenticeship programmes drive Malaysia’s workforce transformation, HRD Corp offered an Industrial Training Scheme (ITS) that employers could utilise through their company levy to support their financial needs.

He explained that the assistance was extended to employers wishing to engage students from industries, colleges, or training institutions for industrial training. The aid is provided as a monthly allowance for trainees for up to 12 months during their industrial training.

“As of Nov 30, 2024, HRD Corp has approved 10,766 training placements under the ITS scheme with financial assistance amounting to RM20.4 million.

“In some cases, the government provides tax reductions or other incentives to micro, small, and medium enterprises (MSMEs) that retain workers despite higher minimum wages,” he said.

He was speaking during the winding-up debate on the National Wages Consultative Council (Amendment) Bill 2024 to amend the National Wages Consultative Council Act 2011 (Act 732) in the Dewan Rakyat today.

Abdul Rahman added that through studies and engagement sessions, the proposal to extend minimum wage provisions to contract apprentices received support from employers and industry players.

He noted that the National Wages Consultative Council (MPGN) conducted an eight-month study on the minimum wage coverage for apprentices, distributing survey forms to 908 respondents and holding engagement sessions with 122 stakeholders, including employer associations, trade unions, academics, and the public from various sectors.

“Additionally, 26 engagement sessions were conducted for the review of the Minimum Wage Order (MWO) and its application to apprentices, with 1,109 participants from employer associations, industry representatives, large employers, MSMEs, trade unions, worker representatives, and experts from the International Labour Organisation (ILO).

“The findings were deliberated in the MPGN, which included representatives from employers, workers, and government agencies. They agreed that the minimum wage extension should also apply to apprentices, in line with the study’s findings,” he said.

Earlier, Abdul Rahman, while tabling the Bill for its second reading, explained that the amendment to Section 2 of Act 732 expanded the scope and definition of a 'contract of service' in line with the same definition in the Employment Act 1955 (Act 265), the Sabah Labour Ordinance (Chapter 67), and the Sarawak Labour Ordinance (Chapter 76), allowing contract apprentices to receive the same minimum wage as permanent employees.

The Dewan Rakyat subsequently passed the Bill with a majority voice vote after being debated by nine MPs.

The Dewan Rakyat sitting continues on Monday.

-- BERNAMA