New Delhi: EPF Contribution Rules: In accordance with the EPF rules, 12 percent of the employee’s salary (basic plus dearness allowance) must be deposited into the provident fund account. The employer is also required to contribute a matching amount, of which 8.33 percent goes to the Employees Pension Scheme (EPS) and the remaining sum to the PF account. Every month, the employer is required to add his and the employee’s portions to the latter’s PF account.
An employee can check whether their employer is making the required monthly provident fund contributions to their account by entering into their PF account on the EPFO portal. Every time an employer contribution is made, the EPFO also sends an SMS alert.
Although the employer is required to contribute on a regular basis to the employee’s PF account, what can the latter do if the former does not?
According to legal experts, the employee has the option to complain to the EPFO about the non-deposit of PF contribution.
“Employees may file a complaint before the EPFO regarding non-deposit of PF contribution which may potentially lead to an inspection out by the authority. Thereafter, the statutory enquiry may commence wherein employers, in addition to their contribution, may be required to pay employees contribution as well,” says Suyash Srivastava, Partner at DSK Legal.
“In the event, the contribution is deducted but not deposited, such non-compliances are viewed very strictly and May warrant criminal action,” he adds.
According to experts, the EPFO may use the EPF Act’s criminal provisions as well as section 406/409 of the Indian Penal Code (IPC) to bring action against such employers.
“In case of default by the employer, the Employees Provident Fund Organization (EPFO) can invoke penal provisions of The Employees’ Provident Funds And Miscellaneous Provisions Act, 1952 (“Act”) to recover the dues from the employer. Complaint can be lodged with Police under section-406/409 of IPC by the EPFO for action against such employers,” says Anushkaa Arora, Principal and Founder of ABA Law Office.
“Section 14-B of the said Act provides powers to recover damages. If an employer makes default in the payment of any contribution to the Fund by giving an opportunity to the employer shall be given a reasonable opportunity of being heard,” Arora adds.
According to the experts, employers must make EPF contributions within 15 days of the end of the pay period. For instance, the company must deposit both employee and employer payments to the PF account by September 15 if the salary for the month of August was paid on September 1 2022.
To ensure that employers make timely contributions, the Union Budget 2021 changed the income tax regulations. Experts believe that if employers don’t pay timely EPF contributions, they cannot claim the discount.
