The Employees’ Provident Funds
and Miscellaneous Provisions Act,
KIRTI SHIVAKUMAR
MEANING
The Employees’ Provident Funds and
Miscellaneous Provisions Act, provides
for compulsory contributory fund for the
future of an employee after his
retirement or for his dependents in case
of his early death.
Applicability
It extends to the whole of India except the State of
Jammu and Kashmir and is applicable to:
a. every factory engaged in any industry specified
in Schedule 1 in which 20 or more persons are
employed;
b. every other establishment employing 20 or more
persons or class of such establishments which the
Central Govt. may notify;
c. any other establishment so notified by the
Central Government even if employing less than 20
persons.
EMPLOYEES ENTITLED
Every employee, including the one employed through
a contractor (but excluding an apprentice engaged
under the Apprentices Act or under the standing
orders of the establishment and casual laborers),
who is in receipt of wages upto Rs. 6,500 p.m., shall
be eligible for becoming a member of the funds.
The condition of three months’ continuous service or
60 days of actual work, for membership of the
scheme, has been done away with, w.e.f. 1.11.1990.
Workers are now eligible for joining the scheme from
the date of joining the service.
EMPLOYEES’ PENSION
SCHEME, 1995
The Government has framed the Employees’ Pension Scheme, 1995,
w.e.f. 16.11.1995. The existing Employees’ Family Pension Scheme
has been merged under the new scheme.
The new scheme envisages providing monthly pension to employees
on superannuation, pensioning to widows on death after
superannuation, monthly pension for children of the subscribers,
monthly pension to members on account of permanent total
disablement during service, etc.
The new scheme shall be compulsory for all the existing members of
the Family Pension Scheme and those who become members of the
Employees’ Provident Fund Scheme on or after 16.11.1995.
EMPLOYER’S CONTRIBUTION
The employer is required to contribute the following
amounts towards Employees’ Provident Fund and
Pension Fund
a. In case of establishments’ employing less than 20
persons or a sick industrial (BIFR) company or ‘sick
establishments’ or any establishment in the jute, beedi,
brick, coir or gaur gum industry. –10% of the basic wages,
dearness allowance and retaining allowance, if any.
b. In case of all other establishments’ employing 20 or
more person-12% of the wages, D.A., etc.
EMPLOYER’S CONTRIBUTION
12% of Basic + DA
A part of the contribution is remitted to the Pension
Fund and the remaining balance continues to remain
in Provident Fund account.
8.33% goes to the Employees Pension Fund
EMPLOYEE’S CONTRIBUTION
12% of Basic + DA will be the employees contribution
Where, the pay of an employee exceeds RS. 6500
p.m., the contribution payable to Pension Fund shall
be limited to the amount payable on his pay of RS.
6500 only.
However, the employees may voluntarily opt for the
employer’s share of contributions on wages beyond
the limit of RS. 6500 to be credited to the Pension
Fund.
Employees Deposit Linked Insurance
Scheme
Framed to provide life insurance to employees
covered by PF act.
1% of employees Basic + DA to be contributed
annually to the Insurance Scheme by the employer
Employee must nominate a person who will receive
this insurance amount in the event of his death.
DISPUTE, DETERMINATION AND
RECOVERY
In case, where a dispute arises regarding applicability
of the Act, the Central Provident Fund Commissioner
or any other officer (to whom the powers of
determination have been delegated), may decide the
dispute and determine the amount due from an
employer, under the Act or the schemes framed there
under.
Before making any order the officer shall conduct
such inquiry as he may deem necessary and shall
allow a reasonable opportunity to the employer for
representing his case.
MODES OF RECOVERY
Any amount of contribution, damages, accumulations required
to be transferred, or administrative charges, due from an
employer, may be recovered from him in any of the following
modes-
a. Attachment and sale of the movable or immovable property of
the establishment/employer;
b. arrest of the employer and his detention in prison;
c.appointing a receiver for the management of the movable or
immovable properties of the establishment/employer.
The employer shall be liable to pay simple interest @ 12% p.a.
on any amount due from him under the Act, from the date on
which it becomes due till the date of its actual payment.
