THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUSPROVISIONS ACT, 1952 BY VIJAY MEHTA
OBJECTIVE The Employees’ provident Funds and Miscellaneous provisions Act, 1952 is enacted to provide a kind of social security to the industrial workers. The Act mainly provides retirement or old age benefits, such as Provident Fund, Superannuation Pension, Invalidation Pension, Family Pension and Deposit Linked Insurance. The Act provides for payment of terminal benefits in various contingencies such as retrenchment, closure, retirement on reaching the age of superannuation, voluntary retirement and retirement due to incapacity to work.
APPLICABILITY OF THE ACT To every factory employing 20 or more persons. Any establishment to which the Act applies shall continue to be governed by the Act even if the number of persons employed therein at any time falls below.
The Employees’ ProvidentFunds Scheme, 1952 Applicability : Every employee employed in or in connection with the work of a factory or other establishment covered by the schemes other than an excluded employee is entitled and required to become a member of the fund from the date of joining the factory or establishment.
Excluded Employee : An employee who, having been a member of the fund, has withdrawn the full amount of his contribution in the fund (a) on retirement from service after attaining the age of 55 years or (b) before migration from India for permanent settlement abroad; or for taking employment abroad An employee whose pay at the time he is otherwise entitled to become a member of the Fund, exceeds Rs. 6,500/- per month. A person who, is an apprentice, or who is declared to be an apprentice by the authority specified in this behalf by the appropriate Government.
Contribution under EPFScheme,19521. Employees : 12% on Basic + DA2. Employer : (a) 3.67% on Basic + DA (b) Administrative Charges : 1.10% on Basic +DA 27 Aug 2012
The Employees’ PensionScheme, 1995Purpose: The purpose of the scheme is to provide for (1) superannuation pension, retiring pension or permanent total disablement pension to employees covered by the Employees’ Provident Funds and Miscellaneous Provisions Act, and (2) widow or widower’s pension, children pension or orphan pension payable to the beneficiaries of such employees.
Contribution1. Employee: Not required2. Employer : (a) 8.33% on Basic + DA It is to be noted that where the pay of the member exceeds Rs. 6,500/- per month, the contribution payable by the employer will be limited to the amt. payable on his pay of Rs. 6,500/- only.
Formalities under EPF Act Employees have been appointed on salary ( Basic+ DA or Consolidated ) of Rs. 6500 or less or covered under the provision of the EPF Act, right from the day of commencement of their work. Employee can contribute more behind Rs.6500 similarly employer also at his discretion can do so but not mandatory EPF Act is applicable to such of the establishments who are engaging 20 or more persons or had engaged 20 or more persons at any time during calendar year.
Formalities under EPF Act workers/ Temporary workers/ Casual Probationary, even if they had performed work even for a day, are technically taken into account for the purpose of assessments of strength of 20 for the purpose of applicability of the act and are also covered under the act. Apprentices/ Trainees are excluded from the definition of employees. Percentage of contribution to be deducted from employees contribution is 12% of his salary, namely Basic + DA , but does not include HRA, CCA, Incentive, Bonus, Washing allowance etc.
Formalities under EPF Act Employer contribution of 12% of the salary of employees is to be paid as under • 3.67% to be remitted in Account No.1 ( Employees Account) • 8.33% to be remitted in Account No.10 towards pension fund In addition to 12% of the employer has to remit 1.61% paid as under • 1.10% Administrative charges in Account No.2 • 0.5% EDLI in Account No.21 • 0.01% Inspection charges in Account No.22
Formalities under EPF Act. To facilitate the employer to make the above contribution a consolidated challan ( in quadruplicate) is made in which all the above contributions could be remitted one challan itself.
The Employees’ Deposit-LinkedInsurance Scheme, 1976 Purpose : To provide life insurance benefits to the employees of the establishments covered by the EPF & MP Act, 1952
Contribution under EDLIScheme,19761. Employees : Not required2. Employer : (a) 0.5% on Basic + DA (b) Administrative Charges : 0.01% on Basic +DA Where the monthly pay of an employee is more than Rs. 6,500 the contribution payable in respect of him by the employer is limited to the amts payable on a monthly pay of Rs. 6,500 only.
Benefits of EDLI schemeThe benefit provided under the scheme in the nature of life insurance as follows:1. On the death of an employment while in service a lump sum insurance amount is payable to his nominee or family members.2. The insurance amount is equal to the average balance in the account of the deceased employee in the Provident Fund during a period of 12 months immediately preceding his death. In case the average balance exceeds Rs.35,000/- the insurance amount payable is Rs. 35,000/- plus 25% of the amount in excess of Rs. 35,000/- subject to a ceiling of Rs. 60,000/-.
Compliances under EPF & MP Act, 1952Sr. Type of Compliance Form Compliance Remark /No No. Date Submitted to.1. Declaration Form from new 2 At the time of RPFC office Joinees joining2. Monthly contribution of Employer Challan Before 15th of In SBI & Employee in Challan for every month previous month2. Return of Employees Qualifying 5 Before 15th of RPFC office every month3 Return of Employees Leaving 10 Before 15th of RPFC office every month4 Monthly Return 12A Before 25th of RPFC office every month
Compliances under EPF & MP Act, 1952Sr. Type of Compliance Form No. Compliance Date Remark /No. Submitted to5. Annual return & reconciliation 3A & 6A Before 30th of April RPFC office statement6. Transfer of PF A/c 13 When new Recruit RPFC office7. Final settlement 19, 10C & At the time of RPFC office 10D Leaving the service8. Advances for various Purpose 31 After 5 Years of membership