The EPF Scheme was launched keeping in mind the benefit of the employees in India even after their retirement. By making it mandatory for a certain pay grade, the employees will have some investments that can help during their retirement. If you work in an organisation with 20 or more employees or if you are earning less than Rs. 15,000 basic pay, it is mandatory for you to have an EPF account opened by your employer. If your organisation or salary does not meet the criteria, your company can voluntarily opt for EPF.
The employer’s contribution to EPF should match your contribution. If your employer fails to deposit the contribution to your EPF account, it is a criminal offence.
Key Takeaways
- It is mandatory for the employer’s contribution to PF to match the employee’s contribution up to 12% of the basic pay and dearness allowance.
- The employer’s contribution to PF payments is due on the 15th of every month.
- A person can take legal action against the employer if they fail to contribute to PF.
- You can check employer’s contribution to EPF by checking the passbook.
How Does the Employer Contribute to the EPF?
The employer has to pay 12% of the basic pay and dearness allowance as the employer’s contribution to PF. The employer has to deposit the amount in the EPF every month. PF payments are due on the 15th of every month. If the employers fail to do so, legal action can be taken against them.
The employer can either remit the PF contribution to the Regional Provident Fund Commissioner’s account or set up an EPF trust and invest in securities. The employer can get a fixed interest from the fund by setting up a trust.
Every month, the employee must convey the following details to the EPF Office
- The number of employees who joined during that month.
- The number of employees who left the organisation during that month.
- New PF members
The employer also has to disclose the amount of PF deducted from the employee’s salary. This portion deducted is only the employee’s contribution.
Word to Remember
UAN – Universal Account Number – A unique 12-digit account number is needed to access the EPF accounts.
How to Check the Employer’s Contribution to the EPF Account?
There are many ways to make sure that your employer’s contribution to PF is being paid on time and in full.
- The easiest way is to ask your employer to share a photocopy of the documents submitted with the EPG Office.
- You can file an RTI (Right to Information) application with the EPFO (Employees Provident Fund Organisation) requesting the details of how much your employer’s contribution to the PF has been. To submit this request, you will have to enter your EPF account number and your Employee ID as part of the application.
- Check your EPF Passbook
Your updated EPF passbook has separate columns for employee’s contribution and employer’s contribution to PF. Downloading your EPF passbook is a reasonably straightforward process and can be done in multiple ways.
- Use the EPFO website – https://www.epfindia.gov.in/site_en/index.php and go to the ‘Our Services’ section. You will find the ‘Member’s Passbook’ where you can enter your UAN and password to log in and view your passbook.
- Use the M-Sewa App. Click on the EPS services tab and use your credentials to log in to view your passbook.
- Use the Umang App and select the EPFO (Employees Provident Fund Organization) option. Click on the ‘Employee Centric Service’ option and enter your UAN. Enter the OTP you must have received on your registered mobile number to view your passbook.
What if your employer has not deposited the employer’s contribution to PF?
You can take legal action against your employer if they have not been depositing the employer’s contribution to PF. Follow these steps to file a complaint.
Option 1: File a complaint with the CVO (Chief Vigilance Officer) at the ERPO, stating all of the details of your employer and submitting necessary proof. The CVO will carry forward the proceedings against the employer.
Option 2: Complaint with the Regional Provident Fund Commissioner (RPFC). They will make sure you receive your money.
Option 3: File a complaint with the police. Not depositing the employer’s contribution to PF is an offence under the Indian Penal Code; therefore, filing a police complaint is also an option. You will have to submit your salary slip as well. Ensure you go to the police station under whose jurisdiction your office is placed.
Consequences for the Employer
- They will not be eligible for PF related tax deductions.
- They can be prosecuted under Section 406/409 of the Indian Penal Code (IPC).
Section 406 is a punishment for criminal breach of trust and is a non-bailable offence.
Section 409 is a Criminal breach of trust by a public servant or a banker, merchant or agent.
- The employer will have to pay damages to all employees whose PF payments were not done on time.
Keep checking to ensure that your employer has been depositing the employer’s contribution to PF on time. This will help you protect your investments in the long run. In the event of an unforeseen emergency, if you notice that your employer has not been depositing PF, the entire process will be highly tedious for you as well.
Conclusion
EPF is a thoughtful way to create wealth for your golden years throughout the working years. You can claim the entire amount at the time of retirement or two months after switching a job.
To get the most out of EPF, make sure to check your EPF passbook regularly. This will help ensure that your employer is making monthly contributions.
Frequently Asked Questions (FAQs)
Yes, part-time employees are also eligible for PF contributions.
Deducting the employer’s contribution is also a legal offence. Follow the same steps as above to file a complaint against the employer.
If employees opt to contribute an additional amount towards EPF, the employer does not have to match the contribution beyond 12%.
No, you can withdraw from your EPF account before retirement only for specific purposes like the wedding your children. This amount does not have to repaid.
Though members cannot withdraw the EPF funds entirely before retirement, partial withdrawal is possible for the following reasons:
On the occasion of marriage or for funding higher education of the member themselves, their children or siblings
Medical treatment for family members
Repayment of home loan
Repairing of own house
Construction or purchase of a house or plot
No, EPF is linked to employers. Without an employer, you cannot contribute to EPF.
Individuals working under Internship or Apprenticeship are not eligible for PF. However, once the apprenticeship ends, you must ask your employer to register for EPF.