SEMINAR

ON
EPF & MP ACT, 1952
– MEMBERS’ SERVICES

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 INTRODUCTION
The Employees’ Provident Funds & Miscellaneous
Provisions Act, 1952 enacted by Parliament came
into force w.e.f. 14.3.1952 and presently the
following three Schemes are in operation under the
Act:-
1.The Employees’ Provident Fund Scheme, 1952
2.Employees’ Pension Scheme, 1995 and
3.Employees’ Deposit Linked Insurance Scheme,
1976
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 FUNDING OF THE SCHEME
Schemes Employer’s Employees’* Central Govt. Total
Provident Fund 3.67% 12% 0% 15.67%
Insurance Fund 0.5% 0% 0% 0.5%
(EDLI)
Pension Fund 8.33% 0% 1.16% 9.49%
Total 12.5% 12% 1.16% 25.66%

* Rate of contribution is 10% in respect of following

establishments :-
less than 20 persons are employed
sick unit declared by the BIFR.

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 (contd…)
Accumulated losses equal to or exceeding its
entire network.
Any establishment in the (a) Jute, (b) Beedi,
(c) Brick, (d) Coir and (e) Gaurgum industry or
factories.

Administrative Charges / Inspection Charges are

applicable @ 1.10% and 0.18% respectively.

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COVERAGE

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 APPLICATION OF THE ACT
 All establishments / factories included in the list of
notified industries and class of establishments as in
Schedule I and employing 20 or more persons.
 Any other establishment employing 20 or more
persons or class of establishments which the
Central Government may notify.
 The Act will come into force in an establishment
from the very date of set up or commencement of
business except certain class of establishments as
excluded under Section 16 of the Act.
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 (contd…)
– Departments or branches of an establishment,
situated in the same place or different places shall
be treated as parts of the same establishment for
coverage under the Act.
– The Act once applied will continue to apply to the
establishment even if the number of employees
fall less than 20 after coverage.
– The Act is applicable to cinema theatres
employing 5 or more workers.

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 VOLUNTARY COVERAGE
• With the consent of the employer and
majority of employees, an establishment
otherwise not coverable can be covered under
Section 1(4) of the Act.

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 MEMBERSHIP
- Persons / employees including regular, casual,
piece rated, part time, temporary and
contract employees.
- Coverage from the date of joining the
establishment / factory.
- All employees getting the wages upto Rs.
6500/- per month.
- In case of wages more than Rs. 6500/- p.m. on
joint request by employee and employer.
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COMPLIANCE

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 ROLE OF COMPLIANCE
Coverage of all coverable establishments .

Extending membership to all eligible

employees in covered establishments .

Ensuring proper implementation of Act &

Scheme provisions.

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 REGISTRATION
• A registration number otherwise known as Code
Number issued to every establishment / factory
to which the Act is applied.
• Issued by RPFC under whose jurisdiction the
establishment is located.
• In case of factory, code number is allotted by
RPFC under whose jurisdiction factory is located.
• A contractor employing 20 persons and engaged
in the work of different establishments may
obtain a separate Code Number.
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 (contd…)
• Normally Code Number is issued within 3 days
on submission of requisite documents like
proof of date of set up, Demand Draft towards
PF dues for one month etc.
• All members be assigned with separate PF
Account Number.
• The provisions of the Act applies to the
establishment suo-moto, on fulfilling the
conditions for the coverage.

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 COLLECTION / RECEIPT OF
CONTRIBUTIONS
• Contributions in respect of each member as
per specified rate received by the concerned
RPFC.
• Maintenance of contribution card member-
wise for each financial year.
• Deduction of employees’ share of PF from
wages of the member before disbursement.

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 (contd…)
• A member is required to contribute
compulsorily upto Rs. 6500/- of his wages and
he may voluntarily opt to contribute beyond
the wage ceiling of Rs. 6500/- (i.e. upto his
wages). During the course of membership, if
the wages (Basic + Dearness Allowance
including cash value of food concession and
Retaining allowances) has crossed Rs. 6500/-
the member and employer are required to pay
PF contribution at least upto Rs. 6500/- only.
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 (contd…)
• If an employee is willing he can also contribute to
the fund in excess of the statutory limit of 10% or
12% of his wages, as the case may be. The
employer need not pay in excess of the statutory
limit.
• The employers’ share of PF contribution should
not be deducted from the wage of a member or
recovered from the member.
• Principal employer is liable for default by their
contractors.
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 ASSESSMENT OF DUES / RECOVERY
• In case of default, the dues can be assessed
under Section 7A of the Act.
• Proceedings u/s. 7A is quasi-judicial process.
• In case of belated remittance damages u/s.
14B and interest u/s. 7Q are leviable.

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 CONSEQUENCES ON DEFAULT
• In case of non-payment of assessed dues the
recovery actions as per provisions u/s. 8 of the
Act read with 2nd / 3rd Schedule of I.T. Act,
1961.
• Penal damages upto 25% per annum and
interest at the rate of 12% payable on the
defaulted amount.
• Attachment of bank accounts.
• Realisation of dues from Debtors.
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 (contd…)
• Attachment of movable and immovable
properties.
• Arrest and detention.
• Action u/s. 406/409 of Indian Penal Code.
• Action u/s. 110 Criminal Procedure Code.
• Prosecution u/s. 14 of the EPF Act.

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 DUTIES OF THE EMPLOYERS
• Enrol all categories of employees including the employees
engaged by or through contractors and also piece rated,
hourly rated employees.

• Remit the contributions and administrative charges before

the 15th of the following month.

• File the initial returns of Form 9, Form 3(P.S.), form 5A.

• File the monthly returns in Form 12A, Form 5, Form 10 and

Challans for remitting the dues.

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 (contd…)
• Maintain the contribution card in respect of each employee
in Form 3A and submit the annual returns in Form 3A and
6A after reconciliation with Challans and form 12A.

• The employer has to ensure that statutory dues in respect

of contractors employees are remitted and returns filed.

• Employer should attest the form  No.2 and  the claims

forms submitted by the member/ legal heirs/ nominees.

• Make available all relevant records for inspection of visiting

officials with due authorisation.

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SERVICES TO
MEMBERS

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(i) Benefits under EPF Scheme
• Payment of accumulation plus interest on
retirement, resignation, death.
• Partial withdrawals permitted for specific
purposes:
o Financing life insurance policies
o acquiring house or site
o Addition and substantial alterations of the dwelling house
o marriage of self and dependents
o education of children
o treatment of illness etc.
o Purchase of equipment by physically handicapped employees.
o Financial assistance on dismissal, discharge, closure / lock out.

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 OTHERS
(ii) Redressal of grievances at field office and Head
Office levels.
(iii) Disposal of grievances in Bhavishya Nidhi
Adalats.
(iv) Know Status of your Claim from EPFO Website.
(v) Lodging the grievances on the Website under
CPGRAM.
(vi) Status of claims settlement from Information
Kiosks.

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 DIFFICULTIES IN IMPLEMENTATION
OF PROVISIONS OF THE ACT
• No voluntary compliance by employers.
• Lack of awareness among establishments
regarding compliance and submission of returns.
• Lack of awareness among the employees
regarding social security benefits.
• Wage ceiling at Rs. 6500/-.
• Existence of Schedule Head.
• Non-issue of statement of member’s account due
to non-submission of returns by the employer.

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 (contd…)
(vii) Outsourcing and employees engaged on
contract.
(viii) Engaging the contract / part time employee in
the Government Departments.
(ix) Not fully computerization in EPFO.
(x) Numerous returns submitted by the
employers.
(xi) Delay in settlement of claims / grievances due
to heavy workload.

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 (contd…)
(xii) Delay in issue of PF statements due to non-
submission of returns.
(xiii) Illiteracy among members for maintaining
their Date of Birth records.
(xiv) Employers reluctant to submit the claim
forms in time.

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IMPORTANT SECTIONS OF THE ACT
• SECTION 1 – APPLICABILITY OF THE ACT
• SECTION 6 – RATE OF CONTRIBUTIONS
• SECTION 7A – DECIDING APPLICABILITY AND
ASSESSMENT OF DUES
• SECTION 7Q – IMPOSING OF INTEREST
• SECTION 8 – RECOVERY OF DUES FROM
EMPLOYERS AND CONTRACTORS

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 (contd…)
• SECTION 11 – PRIORITY OF PAYMENT OF EPF
CONTRIBUTIONS OVER OTHER DEBTS
• SECTION 14 – PENALTIES FOR DEFAULTERS
• SECTION 14B – LEVYING OF DAMAGES ON
BELATED PAYMENTS
• SECTION 16 – EXCLUSION FROM THE ACT
• SECTION 17 – EXEMPTION

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THANK YOU.

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