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M. Deepak (HR)     29 April 2012

How to handle unpaid epf

My client  runs a small scale industry in Hyderabad.  This company crossed 20 employess ( labors ) for 3 months in Feb 2010 to April 2010. There after strength decreased to  less than 20.

In March 2011, an EPF inspector visited them and issued a notice to show all records. After getting notice they started paying EPF from May 2011.

All records are recently given to EPF inspector. It is expected that he will ask industry to pay EPF from Feb 2010. Now question is

(1) Now 80 % workers of previous period are not working and cannot be traced.  So if deposited , then who will get EPF pertaining to previous period ?

(2) Who will pay 12% contribution of labour for previous period ?

(3) Industry owner has split gross salary in basic, HR, Conveyance etc. Basic factor is app. 25% of total salary. Is it acceptable?  Salary paid is almost equal to minimum wages as prescribed under the law. Is this admmissible ?

Please guide use.



Learning

 3 Replies

Bhagwan Tolani (Salaried)     12 May 2012

Dear Deepak,

Good Evening!

According to EPF (Mis. Provsn) Act 1952 section 27, employer can take exemption for entire employees but only if all are agreed for the same.

In this case where employeee strength is below 20 randomly. So, PF is not applicable there.

Please refer to EPF (Misc Provsn) Act 1952.

Please feel free to ask your querry if any.

 

Rgds

Kumar Doab (FIN)     12 May 2012

 

 

An establishment continues to be covered under the Act, irrespective of the fall in the employment strength.

https://www.epfindia.com/for_employers.htm

Sudhir Kumar, Advocate (Advocate)     17 May 2012

You questions are replied as under :-

 

(1) Now 80 % workers of previous period are not working and cannot be traced.  So if deposited , then who will get EPF pertaining to previous period ?

 

Ans : If the PF is not deposited then who faces prosecution under EPF&MP Act 1952.

 

(2) Who will pay 12% contribution of labour for previous period ?

Ans : Your client being defaulter.

 

(3) Industry owner has split gross salary in basic, HR, Conveyance etc. Basic factor is app. 25% of total salary. Is it acceptable? 

Ans : The depends on how much wise is the APFC who assesses the defult.

 

Salary paid is almost equal to minimum wages as prescribed under the law. Is this admmissible ?

 

Ans : EPFO is not a body to ensorece Minimum Wages Act.  They will see the balance sheet and salary expendituere therein.

Please guide use.


 


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