Nagpur-So far, employers faced penal action if they collected provident fund money from workers and did not deposit it in workers’ accounts. In coming days, Employees Provident Fund Organisation (EPFO) will launch penal action if the employers failed to deposit their own contribution as well. EPFO, which covers almost 4 crore employees in private sector and some PSUs, has initiated a special recovery drive covering all kinds of defaults.
Instructions have been issued to lodge consolidated first information reports (FIRs) against all habitual and big defaulters. These specifically provide for lodging FIR if there is a default in only paying employees’ or employers’ contribution. "Any kind of evasion involves cheating of workers and is a cognizable offence," the letter issuing directions in relation to the drive says.
Though EPFO officials have been undertaking action against defaulting firms in normal course, criminal action was initiated only in the event of default in the employees’ share. Now provisions in the EPFO Act that allow filing a criminal complaint in any kind of default are being evoked. The action would be much stricter in the coming days under recovery-cum-prosecution drive launched recently.
At times, during financial crisis, firms continue paying the workers’ share but do not contribute own share towards the social security scheme. In some cases, PF contribution is in default because salaries itself have not been paid. Many of the now closed down sugar cooperatives of Vidarbha had such defaults, said a source.
However, employer’s contribution is equally important because it creates a pension corpus for workers. PF is deducted at 12% of the employees’ salary capped on the upper side at Rs 6,500 a month. An equal amount is to be contributed by the employers, of which almost 80% goes towards the employees’ pension fund (EPF).
Read more: FIRs for all PF defaults – The Times of India