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Employees 'Provident Funds Misc. Provisions Act & The Schemes

1. Eligibility

Any person who is employed for work of an establishment or employed through contractor in or in connection with the work of an establishment.

2. Payment of Contribution

The employer shall pay the contribution payable to the EPF, DLI and Employees' Pension Fund in respect of the member of the Employees' Pension Fund employed by him directly by or through a contractor.

It shall be the responsibility of the principal employer to pay the contributions payable to the EPF, DLI and Employees' Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.

3. Clarification about Contribution

Alter revision in wage ceiling from Rs.5000 to Rs.6500 w.e.f.   1-6-2001   per  month,  the government   will   continue   to   contribute 1.16% upto the actual wage of maximum Rs.6500 per month towards Employees' Pension Scheme. The employer's share in the Pension Scheme will be Rs.541  w.e.f. 1-6-2001.

Under Employees' Deposit-Linked Insurance Scheme   the   contribution O 0,50%   Is required to be paid upto a maximum limit o< Rs.6500. The employer will pay administrative charge & 0.01% on a maximum limit of Rs.6500.

The employer will also pay administrative charges @ 0.01% on maximum  limit  of Rs.6500 whereas an exempted establishment will pay inspection charges @ 0.005% on the total wages paid

Notes:

(1) The above clarification is given by taking wages upto a maximum of Rs.6500 towards wage (basic + DA).

(2) Since an excluded employee i.e. drawing wages more than Rs.6500 can also become member of the Fund and the Schemes on joint request and il, for instance, such an employee is getting Rs. 10,000 per month, his share towards provident fund contribution will be Rs.1200 e.g. 12% and employer's share towards provident fund contribution will be Rs 659   and   Rs.541   towards   Employees Pension Fund.

4. Applicability

Every establishment which is a factory engaged in any industry specified in Schedule 1 and in which 20 or more persons are employed.

Any other establishment employing 20 or more persons which Central Government may, by notification, specify in this behalf.

Any establishment employing even less than 20 persons can be covered voluntarily u/s 1 (4) of the Act.

5.Benefits

Employees covered enjoy a benefit of Social Security in the form of an unattachable and un withdrawable (except in severely restricted circumstan­ces like buying house, marriage/ education, etc.) financial nest egg to which employees and employers contribute equally throughout the covered persons' employment.

This sum is payable normally on retirement or death. Other Benefits include Employees' Pension Scheme and Employees' Deposit Linked insurance Scheme

Rates of Contribution

Scheme

Employee's Employer's Central Govt.'s

Provident Fund Scheme

12%

Amount > 8.33% (in case where contribution is 12% or 10%)
10% (in case of certain Establish­ments as per details given earlier)

NIL

Insurance Scheme

NIL

0.5%

NIL

Pension Scheme

NIL

8.33% (Diverted out of Provident Fund Contrlbutions)

1.16%


Damages

Less than 2 months

@ 1 7% per annum

Two months and above but less than four months

@22% per annum

Four months and above but less than six months

@27%per annum

Six months and above

@37% per annum

Penal Provision

Liable to be arrested without warrant being a cognisable 2ji offence. Defaults by employer in paying contributions or ^^2i|H7 inspection/administrative charges attract imprisonment upto 3 years and fine upto Rs. 10,000 (S.14). For any 15 " retrospective application, all dues have to be paid by employer with damages upto 100% of arrears.

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