Employees' PF & MP Act, 1952
Mission Statement:
The Mission of EPFO, is to extend the reach and quality of Old Age income security programs through consistent standards of compliance and benefit delivery in a transparent and responsive manner. To build approval and confidence of Indians in our methods and systems by promoting integrity, thereby contributing to economic and social well-being.
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The Employees' Provident Fund came into existence with the promulgation of the Employees' Provident Funds Ordinance in Parliament on 04th March, 1952 and is now referred as The Employees' PF & Misc. Prov. Act, 1952. It applies to the whole of India, except Jammu & Kashmir. The Act was enacted on 04th March, 1952 under the supervision of Central Board of Trustees.
Since its enactment in 1952, the Act has been amended several times. The following three schemes are in operation under the Act:
- Employees' Provident Fund Scheme, 1952.
- Employees' Deposit Linked Insurance Scheme, 1976.
- Employees' Pension Scheme, 1995. (replacing the Family Pension Scheme, 1971)
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Applicability under the Act:
- Every Factories or Establishments employing 20 or more persons are covered from the date of its setup are covered under the Act. Theatres employing 05 (Five) or more persons are also covered.
- Government of India after giving 02 Months notice of its intention so to do, apply the provisions of this Act to Establishments where less than 20 persons are employed.
- Where an Establishment consists of different departments or has branches, whether situated in the same place or in different places, all such departments or branches shall be treated as parts of the same Establishment. under Sec-2A.
- Establishments to which this Act "Once Applicable" shall continue to be Governed by this Act notwithstanding that the number of persons employed therein at any time falls below then 20 (Twenty) persons.
- The Current Wages Ceiling Limit for coverage under the Act is Rs. 15000/- (Basic + DA) p/m month w.e.f: Sep 2014, (Earlier it was: 6500/-p/m before that it was: 5000/-p/m)
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The Act does not Apply to:
- The Co-operative Societies employing less than 50 persons and working without aid of power. 16(1)(a).
- The Establishment to which this Act applies and is owned/controlled by the Government, even if the number of employees is less than 20 at a later date. [1(5)].
- The Establishments under the control of State Government or Central Government Employees who are getting benefits in the nature of Contributory P.F. Or Old age pension as per rules framed by the Government.
- The Establishment set up under any Central, Provincial or State Act and the Employees who are getting benefits in the nature of contributory P.F. Or Old age pension as per rules framed by the Government.
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Voluntary Coverage:
- If any of the Establishment is not satisfying the above two conditions, but if the employer and majority of the employees are willing, the establishment may be approved by the Central P.F. Commissioner for coverage under the Act. (Voluntary coverage)
Who's an Non Eligible Employee?
Non Eligible for Provident Fund:
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An "Employee" of the Company to whom both the following conditions are satisfied at the time of Joining to the Organization.
- The Employee's Basic Salary + DA should be more than Rs. 15,000/-.
- Employee's has withdrawn the PF & Pension Account balance before the joining and does not have any Balance Amount in Old PF & Pension Account.
- As per Para 2(f) of the EPF Scheme, an Employee has to contribute to the accumulation from Provident Fund on Retirement from the age of 58 years.
Non Eligible for Pension Fund:
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- If organization provides the EPF benefits to its all employees whose Basic Salary + DA is salary more than ? 15,000/- w.e.f. Sep 2014. If Employee's has withdrawn the PF & Pension Account balance before the joining. Then Employee's 8.33% Contribution part will go to the Provident Fund Account. In place of Pension Account. Form 10C amount is need to submit in his personal account.
Employee's & Employer's Contribution
PF Calculation Account-wise
Employee's Share (to EPF Fund) AC: 01
@ 12% of Basic + DA (Ac: 01)
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@ 3.67% of Basic + DA or (12%- ? 1250) (Ac: 01)
EPF Total in Ac. 01: @ 15.67% or (@ 12% + (12%- ?: 1250/-)
EPS
Total Contribution to EPF & Pension Fund, Ac: 01 & 10
PF Administrative Charges in Ac: 02 (@ 0.85% of Total Wages)
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(Minimum ?: 500/- functional & ?: 75/- for non functional)
Contribution to EDLI, Ac: 21 @ 0.5% of Basic & DA or ? 75/-
EDLI Relocation Charges, Ac: 22 @ 0.01% of Basic & DA or ? 25/-
(Minimum ?: 200/- functional & ?: 25/- for non functional)
Total Monthly Contribution w.e.f: Jan 2015: (12%+12%+0.50%+0.01%)
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For EDLI Exempted First Inspection Charge @ 0.005% of Basic + DA
EDLI Scheme & Admin. Charges
What is EDLI ?
"Employee's Deposit Linked Insurance" is basically an "Insurance" to the employees under EPF & MP Act, 1952, Since Aug 01, 1976. It is linked with Deposit in EPF A/c. When an employee dies while in service, his/her nominee gets some Compensation based on deposit in EPF Account. (36 months wages or ?: 3.0 Lacs & along with the admissible amount introduced sub para (4) of para 22. Hence the total amount is ? 3.60 Lacs w.e.f Sep 2014, earlier it was 1.3 Lacs, w.e.f. May 2010).
On behalf on Employees, the employer has to pay @ 0.50% of Basic + DA on ?: 15000/- as its Monthly Contribution with total contribution, the employee's nominee to get the claim in case of death, while in service.
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Deposit-Linked Insurance Fund Account: The Amount of Administrative Contribution and also the Central Government's contribution made under sub-section 2 and 3 of section 6C shall be credited to the "Deposit-Linked Insurance Fund Account", and all expenses for administering the Benefits under the Scheme shall be met out of the said Account.
Contribution Payment & Interest
- PF Total Amount of Monthly Contribution of (Employee's & Employer's share) deposited through Online Generated Combined Challan in Ac: 01, 10, 21 & 22 from EPFO website, w.e.f. April 01, 2012. Payment of PF Contribution via Online Payment (Retail / Corporate Banking) with 56 Banks w.e.f. 2015. Online payment of PF contribution make the process very easier to the EPFO in few minutes. Web-link: https://firstranker.com/prelogin/icollecthome.htm
- Earlier the payment was made to EPFO via State Bank of India Challan in triplicate copy (Combined Challan) along with Cheque or Demand Draft on or before 15th of month following calendar month.
- Grace Period 4 Cheques Clearing: Earlier in manual process, EPFO provides 5 days Grace period from due date 15th Day to Employer for making PF Contributions. But from May 01, 2015 PF Contribution payment is to be made, so the final due date will be consider 15th day of following month. If payment is made after 15th Day, EPFO charges the Interest & Damages as per rules.
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Social Security Benefits of EPF
Employees' Prov. Fund Scheme-1952
- Retirement
- Medical Care
- Housing Loan
- Family Obligations
- Education of Children
- Financing of Insurance Policy
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Employees' Pension Scheme-1995
- Monthly Member's Pension Scheme
- Widow & Children Pension
- Orphan Pension
- Reduced Pension
- Disablement Pension
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Non Refundable Advances of EPF
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| Type of Benefits | Terms & Condition |
|---|---|
| 1. Withdrawal from the fund for a) The purchase of House b) Construction of House | 5yrs. Of membership of fund.(Min. balance in member's a/c should be Rs.1000/-) |
| 2. Advance from the fund for repayment of loan | 10 yrs membership of the fund and the member should have taken loan from Govt. Body. |
| 3. Advance from the fund for illness viz hospitalization for more than a month, major surgical operation or suffering from T.B.. Cancer etc. | Stay in Hospital at least for one month |
| 4. Advance from the fund for marriage of self/son/ daughter/sister/brother etc | 07 years membership of the fund and the min.bal.in members a/c should be Rs.1000/- |
| 5. Advance from the fund for education of daughter/son | Same as above |
| 6. Grant of advance in abnormal condition. (natural calamities etc.) | a) Certificate of damage from appropriate authority. b) State Govt. Declaration |
Duties of Employer @ PF
- Enroll the eligible employees as EPF Subscriber from the date of Joining to the Organization. Ask the New joinee to fill Form-11 (Member Details) & Form-02 (Nomination Form) with details of Employee's Family.
- Merge the Old Universal Account Number (UAN) with the new one and get the previous employment confirmation on Online Transfer Claim Portal. Get completed Form-02 to the EPFO for the nomination updation and E-KYC process also.
- Maintain EPF Eligibility Register consists of (a) Employee's Details (b) PF/Pension Registration, Nomination and PF Account Details (c) Inspection Book to record the Observation by PF Inspector.
- Maintain such accounts in relation to the amounts contributed by the employees. To comply with all the directives issued by the Government for implementation of the scheme.
- Process the PF Claim Form of Left or Retired employee's and settle the claims without any objection. Also guide the Left employee's to opt for the continuation of withdrawal to keep some amount for his / her future needs.
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Various forms of EPF:
| Forms for Employer | Forms for Employee |
|---|---|
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Damages & Interest:
Recovery of Damages:
If an Employer makes default in the Payment of any Contribution to the Fund or in the transfer of accumulations required to be Transferred. The Provident Fund Commissioner or such officer as may be authorised by the Central Government by notification in the Official Gazette in this behalf, may recover from the employer by way of penalty, damages at the rates given below:
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- Less then 2 months :- @ 17% p.a. on total due Contribution
- 02 months & above, but less then upto 04 months- @ 22% p.a. on total due contribution
- 04 months & above, but less then upto 06 months: @ 27% p.a. on total due contribution
- 06 months & above @ 37% p.a. on total due contribution
Reduction or Waiver of Damages:
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The Central Board may reduce or waive the damages levied under section 14-B subject to the following terms and conditions:
- In case of a change of management including transfer of the undertaking to a co-operative and in case of Merger or Amalgamation of the undertaking with any other industrial company, complete waiver of damages may be allowed.
- In cases where the Board for Industrial and Financial Reconstruction (BIFR) to be recorded in its schemes, in this behalf recommends, reduction upto 100 per cent may be allowed.
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