GENERAL INFORMATION :
APPLICABILITY : Employment of 20 persons in an establishments even for a single day will bring the establishment with in the purview of the act as reported in Joshi G.V. Vs State of Mysore 1969 LIC 1216: AIR 1969 MYS HC 300: 18FLR 387: 35 FJR 411 (Mys DB). U/s 1(3) (a) of The EPF Act., 1952
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. All categories of employees like regular, contract, casual, permanent, piece-rated, Partners receiving Salary and Paid Directors. (Outsourced services like Security, House Keeping, Gardening etc., shall also be taken into consideration for reaching the mandatory strength. However, the contribution shall be paid only to the employees on rolls. U/s 2(f) The EPF Act.,
BENEFITS : 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 to which employees and employers contribute equally throughout the covered persons’s employment.This sum is payable normally on retirement or death. Other benefits include Employees’ Pension Scheme and Employees’s Deposit Linked Insurance Scheme under para 68-B, 68-K, etc.,The EPF Scheme
Contribution by Employee: A member shall contribute towards his share of contribution @ 12% on Basic and DA. Para 29 of The EPF Scheme
Contribution by Employer: The Employer shall also contribute towards his share of contribution @ 12% comprises of 3.67% towards provident fund and 8.33% towards pension fund.
Interest: A member shall be eligible to get interest @ 9.5% at present (and shall change from time to time) on his share of contribution i.e. 12% and Employer’s share of contribution @ 3.67% totaling to 15.67%. Para 60 of The EPF & Scheme
The member’s share of contribution @ 8.33% towards pension will entail him to get pensionary benefits for himself and his dependent family members.
ANNUAL SUBSCRIBER’S STATEMENT IN FORM NO.23 : A member shall be issued by the employer an Annual Subscriber’s Statement in Form No.23 comprises of his share of contribution and the employer share of contribution totaling to 15.67% together with interest for the year i.e. March to February. However, the pension fund contribution @ 8.33% shall not be mentioned in the Statement.
Pension Fund : A member shall contribute @ 8.33% which is Rs.541/- on a Basic Salary + DA of Rs.6500/- to be eligible to get monthly pension provided he/she should have completed 10 years of continuous service with a single employer or with multiple employers and shall have the right to claim only at the age of 50 - 58 Yrs from the company whichever is earlier. Para 3 of The EP Scheme
Pension & Family Pension : A member after completing 10 years of service after attaining the age of 50 years is eligible for member pension and after his death his spouse will get family pension and at the same time his two children will also get children pension on completion of 25 years. Before attaining 58 years a member can apply for Scheme Certificate on his leaving the service. A member is entitled for disablement pension in case of permanent and totally disabled during employment (Conditions Apply).Para 12 of The EP Scheme
Claims: A member shall claim the pf and pension contribution in case of an member resigning / separation from the company after sixty days from the last working day in Form No.19 @ 10C which shall be submitted for the purpose. The processing of claims shall take about 30 – 45 days on submitting the claim application. An employee working for less than six months and quitting the employment shall not be eligible to claim the pension contribution.
Transfer In/Out : An employee (member) shall also apply for transfer in Form No.13 of his pf accumulation in case if he/she has previous accumulation.
Excluded employee: Para 2(f) of the scheme defines that where an employee exceeds a Basic and DA of Rs.6,500/- per month shall be exempted from the act.
Employee’s Deposit Linked Insurance: An employee shall also be covered under the Deposit Linked Insurance. The insurance amount shall be paid to the nominee/Legal Heir only on death of a member.
Rate of Contribution: The rate of contribution is 12% from the employee and an equal share from the employer. In addition the employer shall also contribution towards the following Para 29 of The EPF Scheme 1952
1.1% towards Administration Charges
0.5% towards Employees Deposit Linked Insurance
0.01% towards inspection charges
The total contribution is 25.61% comprising of employee’s share of 12% and Employer’s share of 13.61%.
2. Payment of contribution:
Para 30 (3) of the EPF Scheme 1952 fixes the responsibility on the employer to pay both the contributions payable by himself in respect of the employee directly employed by him and also in respect of the employee employed through the contractor.
3. Mode of contribution:
Para 38 of the EPF Scheme 1952 defines that the employer shall within 15 days from the close of every month remit the employee’s share and with his own share and as well as administrative charges as fixed by the central government from time to time. The same shall be paid to the fund by a separate bank draft or cheque.
Sec 7 Q of the Act define that the employer shall be liable or becomes payable by him at a simple interest of12 % per annum or at such higher rates on any amount due from him till the date of its actual payment and at such higher rates of the interest specified in the scheme which shall not exceed the lending rate of interest charged by any scheduled bank
Recovery of damages for Default in payment of any contribution:
Para 32 A (1) of The EPF Scheme 1952defines that any default in payment by the employer in the payment of contribution to the fund the regional provident fund commissioner shall have the power to recover from the employer by way of penalty such as damages which shall be as follows:
Up to 2 months
2 months and above but less than 4 months
4 months and above but less than 6 months
6 months and above
MONTHLY RETURN :
- A wages payment register showing the amount recovered and paid towards the provident fund, employee’s qualifying for membership and resigning from the company shall be submitted on or before 25th of the month for the previous month. Para 36 of The EPF Scheme 1952
- ANNUAL RETURN :