What occurs when employer delays EPF contribution? What do you have to do?
Non-payment of Employers Provident Fund (EPF) contributions on time may appeal to penalties and better curiosity fee to employers. According to a Supreme Court ruling, employers are liable to cowl damages if there’s a delay within the fee of an worker’s EPF contribution.
As per the Employee’s Provident Funds and Miscellaneous Provisions Act, 1952, Section 7Q, the employer is liable to pay larger rate of interest on quantity due from him below the Act from the due date of precise fee. Under Section 14B of the identical act, Employer’s delayed fee of EPFO might be a cognisable offence. There can also be a provision which authorises the federal government to recuperate the harm triggered on account of non-payment from the employer.
Also Read: Do you qualify for larger pension below workers’ provident fund?
Recently, EPFO notified the speed at which harm on account of delayed fee is levied on employers. Following are the charges of the harm imposed on the employers for delayed EPFO fee.
PeriodApplied curiosity (every year)0-2 months5percent2-4 months10percent4-6 months15%More than 6 months25%
According to the EPFO, damages are restricted as much as 100 per cent of the quantity in arrears. It additionally added that 12 per cent annual curiosity is utilized on the quantity due for your complete interval of delay.
Also Read: Can a niche in profession have an effect on PF withdrawal?
“Employers defaulting on contributions are liable to pay Damages & Interest on the quantity due,”tweeted EPFO on February 17.
Amount paid by the worker & employer in EPF
According to part 7Q of Employee’s Provident Funds and Miscellaneous Provisions Act, 1952, employer is liable to pay a easy curiosity on the fee of 12 per cent every year. It is necessary that worker and employer ought to contribute equal quantity to the EPF account of 12 per cent of the worker’s primary wage, dearness, allowance, and retention allowance, if utilized.
Also Read: In 16.5% leap, EPFO provides 16.26 lakh subscribers in November 2022
What to do when employer delays EPFO contribution?
-Stay up to date in regards to the month-to-month deposit of your PF contributions on a month-to-month foundation. EPFO sends SMS alerts. Employees can even test by logging in to the EPFO portal.
-On discovering delay in funds by employers, workers can file a grievance with the EPFO in opposition to the employer.
-The grievance will provoke an inquiry by the EPFO in opposition to the employers. If discovered responsible of delayed fee, there could be authorized motion in opposition to the employer.
-EPFO can recuperate the broken quantity by charging curiosity on the late deposit as effectively. There may also be a police grievance in opposition to the empoyer.
-Before starting the penal motion, employer might be given affordable alternative to current their level.
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