EMPLOYEES' PROVIDENT FUNDS ACT 1952
The
Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is an
important legislation which plays a significant role in the sphere of Labour
Law. The Act came into existence in 1952 which assures essential Provident
Fund, Employees Pension Scheme and Deposit Linked Insurance in factories and
other establishments for the benefits of employees. This brief covers, Applicability, Eligibility, PF Contributions and other relevant provisions that are key to EPF Act
APPLICABILITY
1.
Applies to
establishment/factory in Schedule I, employing 20 or more person [Section
1(3)(a)]
2.
The Central
Government by notification may apply it to establishments employing 20 or more
person [Section 1(3)(b)]
3.
By agreement
between the employer and the employees [Section 14]
4.
Continues to
apply to the establishment even if number falls below 20 [Section 1(5)]
5.
Central
Government can also apply by notification to establishments employing less than
20 employees [Proviso to Sect5ion 1(3)]
ELIGIBILITY:
Any person
who is employed for work of an establishment or employed through contractor in
or in connection with the work of an establishment
BENEFITS:
1.
Employees
covered enjoy a benefit of Social Security in the form of an unattachable and
unwithdrawable (except in severely restricted circumstances like buying house,
marriage/education, etc.) financial nest/egg to which employees and employer
contribute equally throughout the covered persons' employment
2.
The sum is
normally payable on retirement or death
3.
Other
benefits includes employees' Pension Schemes and Employees' Deposite Linked
Insurance Scheme
PAYMENT OF
CONTRIBUTION
1. The employer shall pay the contribution
payable to the Employees' Pension Fund in respect of the member of the
Employees' Pension Fund employed by him directly or by or through a contractor.
2. It shall be the responsibility of the
principal employer to pay the contributions
Payable to the Employees' Pension Fund by himself in respect of the
employees directly employed by him and also in respect of the employees
employed by or through a contractor
RATE OF
CONTRIBUTION PAYABLE:
1.
Employer has
to make a contribution of 12% and employees' contribution of 12% (as revised
w.e.f 22nd September 1997) to the Provident Fund Account.
2.
8.33% of the
employers' contribution goes towards the Employees' Pension Fund and the
remaining 3.67% (approx) goes towards the Employees' Provident Fund Account
INTEREST
Employer
liable to pay 12% simple interest or higher rate on amount due from due date
till payment
PENAL
PROVISIONS
|
OFFENCES
|
PENALTY
|
|
Avoiding /
Causing/ Making False statements or representation
|
Rs 5,000.00 fine or one year imprisonment or
both
|
|
Contravention
or default of Section 6 or 17
|
Imprisonment
extending to 3 years
|
|
Non-Compliance
of any provision
|
Imprisonment
extending to 1 year or fine extending Rs 4,000.00 or both
|
|
Contravening
or defaulting of conditions subject to which exemption was granted
|
Imprisonment
extending to 6 months and fine extending to Rs 5,000.00
|
DAMAGES
1. Can be recovered under Section 14B for the default in paying
the contribution as specified para 32A
|
PERIODS
|
RATE %
|
|
Less tahn2
months
|
5
|
|
2 months
and above but less than 4 months
|
10
|
|
4 months
and above but less than 6 months
|
15
|
|
6 months
and above but less than 6 months
|
25
|
NON-APPLICABILITY
Establishments
1.
Registered under
the Co-operative Society's Act or any relating law employing less than 50
persons
2.
Belonging or
under the Government's Control whose employees entitled to benefits as per the
Government's Rule or Scheme.
