The Levy System of Establishing Skills Development Fund

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Articles

By Lokethar

Generally speaking, employers would like to hire workers who already possess the competencies required for the job. However if the job market is “tight” for such workers then the employer would end up hiring workers who , more or less could be trained and would not “job hop” at the slightest opportunity that comes up. Job hopping is the dilemma facing “employers” everywhere regarding training of skilled workers needed by them and their industry. Employers will try to cut down their expense as much as they can. So when it comes to “subsidizing” training of workers for “competitors” they would rather not be “magnanimous”.

HR policies
Of course there are big enterprises with good HR policies which include developing skills of workers in their employment. It’s mostly the small and medium enterprises that fit into the scenario described above. And in Myanmar the small and medium enterprises make up more than 90% of all economic enterprises. Hence the scenario is likely to be representative of the SMEs in Myanmar.
Well, the Employer Initiated Training system seems to have come up with a solution whereby employers collectively contribute to finance skill training of workers. The system involves each employer contributing a small percentage (usually 0.5% to around 1.5% or so) of the monthly payroll of the enterprise’s “skilled workers”, which in financial terms is a “levy”, as contribution to a “skills development fund” set up under a law allowing for setting up of such funds.
The employers who are interested in training or having their workers trained by an outside training provider, can “get back” a large portion of their training cost from the SDF. The SDF usually can only reimburse worker training expenses to the employer and not directly to the training provider. This is because the training has to be at the initiative of the employer/s.

Worker Skills Training Centre
If on the other hand an employer or a group of employer set up a Worker Skills Training Centre and conducts training according to prescribed or accepted standards, they can ask for being exempted from payment of levy to the SDF.
In Myanmar, the employment and skills development law of 2013, promotes occupational competency standards based training of skilled workers. In fact it also embodies setting up a skills development fund for financing workers’ skills development based on the “Levy” system mentioned above.
With charity to all and malice to none.

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