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Instructions to Employers
This is for guidance of the employers
only and not intended to override any legal provision. In case of any dispute
the provisions of the EPF & MP Act 1952 and the Schemes framed there
under, as amended from time to time, will prevail.
Frequently Asked Questions. 1. What does the coverage mean? Employees’ Provident Fund Organisation (EPFO) is
managing three Schemes viz., EPF Scheme 1952, EPS 1995 and EDLI Scheme 1976. Coverage
under the EPF Act means simultaneous coverage under all three Schemes, unless
exemption is granted from a particular scheme. The date on which the
establishment is brought under the coverage of EPF &MP Act and the Code
number (starting with KR/) is indicated in the coverage notice. The PF code
number allotted is permanent and should be quoted in all returns and communications
with the PF office. 2. What should an employer do on receipt of the coverage notice? An employer is required to submit initial returns (please
see annexure for details) within 15 days from the date of receipt of coverage
notice. The employer is also required to remit the contribution from the date
of coverage to the month prior to the date of issue of coverage notice within
15 days of receipt of the notice. The employer is also required to submit all
monthly and annual returns (please see annexure for details) from the date of
coverage. 3. What are the Contribution and Charges payable? a. If the
employee strength at the time of coverage is 20 or more Employee’s contribution : 12%
of wages Employer’s contribution : 13.61%
of wages b.
If
the employee strength at the time of coverage is less than 20 Employee’s contribution : 10%
of wages Employer’s contribution : 11.61%
of wages The above amount is to be remitted in different heads
as under
Note 1 : The rate of contribution is decided on the employment
strength on the date of coverage. If the employment strength falls below 20
subsequently, the rate of contribution will remain unchanged. Note
2 : For those employees
above 58 years of age the contribution towards EPS (A/c No. X) @8.33% is not
required to be diverted and this amount is also credited to A/c No. I. 4. What emoluments constitute wages for calculation of PF
contribution as above? All emoluments including Basic pay, dearness allowance
and cash value of food concession. Allowances such as House rent allowance,
Traveling allowance and Overtime allowance paid, over and above minimum wages
applicable to the establishment, as per pay structure of the establishment can
be excluded from the calculation. It may be noted that no such bifurcation is
permissible below minimum wages. 5. What is the upper wage limit for calculating PF contribution? The statutory wage ceiling for calculating PF
contribution is Rs.6500/- per month. However, the contribution can be made on
higher salary at the option of the employee and employer. Contribution under
EPS can be made on higher wage limit only from the date the wage exceeds the
ceiling limit and not subsequently. 6. Who are required to be enrolled to PF? Any person employed directly or indirectly by the
establishment, working in or in connection with the establishment, including
those employed by or through a contractor is required to be enrolled to PF. The
following categories of employees are required to be enrolled to PF. a.
Permanent
employees b.
Temporary
employees c.
Daily
waged employees d.
Contract
employees e.
Trainees f.
Retired
Govt. employees (including Ex-Service Men) The following categories are excluded from enrolment. a. Those who are drawing more than
Rs.6500/- at the time of joining. An employee who was drawing lesser amount at
the time of joining and pay subsequently raised to more than 6500/- is required
to continue as member irrespective of salary. b. Those who have withdrawn their benefit
under the EPF Scheme on attaining the age of 55 years. c. Apprentices under the Apprentices Act or
under the certified standing orders of the establishment. Note 1: Retired
Government employees drawing Government pension are required to be enrolled to
PF. Note 2 : Employees engaged through contractor eg:- Security Contractor,
House Keeping Contractor or any Contractor/Sub-contractor engaged in any
activity which is connected with the work of the establishment etc are also required to be enrolled to PF. It
is the duty of the Principal employer to enroll the contract employees,
irrespective of any agreement executed with the contractor. The contributions
in respect of the contract employees (both employer and employee share) are
required to be deducted from the contractor’s bill before releasing the bill. Note 3 : The excluded employee can be enrolled to PF on joint
application of both employer and employee. Note 4: A
declaration Form-11 is to be obtained from all employees joining the establishment. 7. What is the minimum eligibility period for enrolment to PF? There is no minimum service period for enrolling an
employee to PF. An employee is entitled and required to be enrolled to PF from
the date of joining in the establishment. 8. Some employees are not willing to contribute to PF. What should
the employer do? The employer is required to enroll the employee from
the date of his joining and enrolment is mandatory. It is the duty of the
employer to enroll all the eligible employees from the date of joining
irrespective of their willingness. 9. Is there any age limit for enrolment under EPF? No, there is no age limit for enrolment under EPF.
However, members of EPF Scheme who retired from service after 55 years of age and
settled their EPF accounts in full need not be enrolled. 10. What is the due date for remittance of PF contribution? 15th of subsequent month i.e., the
contribution based on salary for the wage month of October is to be remitted on
or before 15th of November. Belated remittance will attract Penal
Damages and Interest up to 37% per annum. However, a grace period of 5 days is
allowed for remittance without penalty. 11. How the PF contribution can be remitted? The contribution is to be remitted in any branch of
State Bank of 12. Is there any liability to pay the contribution if the salary is
not paid to the employees? Yes. The employer is required to remit the
contribution (employer and employee share) on the due date even if the salary
is not paid. 13. What if the contribution is not remitted within time? All belated remittances will attract Penal Damages and
Interest ranging from 17-37% per annum. Besides, prosecution steps will be
initiated against the employer before the Judicial First Class Magistrate.
Default in remittance of employees’ share of contribution deducted from their
salary constitutes Criminal Breach of Trust punishable under Section 406/409 of
Indian Penal Code. Non-remittance of contribution will also lead to recovery
proceedings such as attachment of bank account, attachment and sale of movable
and immovable property of the establishment and employer and arrest and
detention of the employer in civil prison. 14. Is there any punishment for non-submission of returns or
violation of any other provision? Yes. Non-submission of returns in time or
non-compliance with any provision of the EPF Act or the Schemes framed there
under, including non-production of records before the Enforcement Officers is
an offence under Section 14 of the Act read with para 76 of the EPF Scheme and
is punishable. 15. What are the benefits to the employees and how will they claim
the benefits? EPF Scheme provides various advances/withdrawal from the
member’s accounts for purposes like housing, education/marriage, sickness etc.
On leaving the service the employee can get his account settled. The EPS
provides pension to members and their family. Those members leaving service
without completing the eligible service can either avail withdrawal benefit or
Scheme Certificate. The EDLI Scheme provides deposit linked insurance benefit to
the family of the members who die while in service. Various forms are
prescribed for availing these benefits. The employer is duty bound to get the
forms filled up by the beneficiaries and forwarded to EPF Office under his attestation. 16. What are the other duties of the employer? a.
The
employer is required to maintain all the relevant records in the premises
itself and produce it before the Enforcement Officer for inspection at any
reasonable time, with or without notice. b.
The
employer is also required to attest the applications for advance or final
settlement of the members account within 5 days of receipt of the application.
The employer is also required to provide all information and assistance in
identifying the beneficiaries, including the survivors of deceased employees,
for speedy settlement of claims. Annexure Retuns to be filed by the Employer
Calendar for Employers
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