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lecture 10 (1)

Provident fund LLB

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17 views

lecture 10 (1)

Provident fund LLB

Uploaded by

garvitparashar8077
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Employees Provident Funds And Miscel Provision Act,1952

• Employees' Provident Fund is a statutory benefit payable to employees working in India.


• The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 ("Act") is applicable
pan-India.
• The administration and management of Employees' Provident Fund(EPF) is carried out by the
Central Board of Trustees (CBT) established by the Central Government consisting of
representatives of the Government, employers and employees respectively.
• The Employees' Provident Fund Organization (EPFO) assists this Board in its activities.
• EPF is a welfare scheme brought into force to secure a better future for employees.
• It is a statutory benefit available to the employees post retirement or when they leave the
services.
• In case of deceased employees, their dependents will be entitled for the benefits.
• Under the Employees' Provident Fund Scheme (EPF Scheme) both employers and employees
have to make their contributions towards the Fund.
• Interest earned on the amount is credited to the member's Provident Fund Account (PF
account) and is available to the employee at the time of retirement or exit from employment as
the case may be, provided certain conditions are fulfilled.

Applicability of the Act


• The Act applies to-
• 1) Every establishment,
• Which is a factory,
• Which is engaged in industry, specified in Schedule I to the Act and
• in which 20 or more workers are employed;’
• 2) Any other establishment or class of establishment
• Employing 20 or more persons,
• Which may be specified by Central Government
• Once it applies, it continues to apply even if the number of employees fall below 20.
• The Act does not apply to:
• 1) A co-operative society employing less
than 50 persons and working without the
aid of power;
• 2) A newly set up establishment for an
initial period of 5 years;
• 3) Any Central/ State Government
establishment having its own scheme
of provident fun

Schemes
• The following three schemes have been framed under the Act by the Central Government
• a) The Employees' Provident Fund Schemes, 1952:The purpose of providing a post retirement
benefits
• b) The Employees' Pension Scheme, 1995: The purpose of providing the superannuation
pension, retiring pension or permanent total
disablement pension.
• c) The Employees' Deposit-Linked Insurance Scheme,1976: The purpose of providing
insurance benefits to the family in case of death while in service

Employees covered under the scheme


• Person who is employed for wages
• in any kind of work, manual or otherwise,
• in or in connection with the work of the establishment and
• Who gets his wages directly or indirectly from the employer
• It further includes the following;
• 1) A person employed by or through a contractor in or in connection with work of the
establishment.
• 2) Person engaged as an apprentice (trainee), not being an apprentice
• Under the Apprentices Act, 1961 or.
• Under the standing orders of the establishment.

Eligibility to Join Provided Fund


• An employee whose pay is more than Rs.15,000/- p.m. is not eligible to join Provident Fund.
• However, an employee who is drawing a salary of more than Rs.15,000/-p.m. can become
member of Provident Fund with the permission of Assistant Provident Fund Commissioner, if he
and his employer agree.
• However in such a case, provident fund contribution will be as per Rs.15,000/-p.m.)
• An employee ceases to be the member of provident fund on attaining the age of 60 years.

Employees' Provident Fund Scheme


• This is the main scheme under the Act.
• Both the employer and employee have to pay contribution to the Provident Fund.
• The employer has to Deduct contribution of employee from salary of employee and Pay
contribution of both (employee's &employer's contribution)
• Through a challan
• Through approved banks.
• The employees gets a lump sum amount
including self and employers contribution with interest on retirement.

Amount of Contribution
• The contribution is 12% of pay i.e., basic wages and dearness allowance + Retaining
allowances
• Contribution of both employer and employee is same i.e., 12% each.
• Note: An employee can voluntarily pay more contribution above the statutory rate.
• However, employer does not have to match the voluntary contribution over and above the
statutory rate.

Excluded Employees
• Following are the 'Excluded Employees' from Employees' Provident Fund Scheme, 1952:
• An employee who has withdrawn the full amount of his accumulations in
the Fund;
• An employee whose pay exceeds the prescribed amount (Rs. 15,000/-pm);
and
• An apprentice.

Employees Pension Schemes


• The scheme is applicable to all subscribers of employee's Provident Fund scheme.
• Employers' PF Contribution is Diverted Employers' contribution of 8.33% is diverted to the fund
of pension scheme and Balance 3.67% is credited in the employees name in the Provident
Fund account.
• Employee DO NOT Contribution Employee does not have to make any contribution.
• Members of this scheme will get pension on Superannuation or Retirement from service or
Disablement during service.

Who will get Pension


• Family pension will be available to widow/ widower for life or until she/he marries.
• In addition, Children will be entitled to pension up to 25 years of their age.
• If the person is unmarried or has no family, pension is given to nominee for specified period.

Employees Deposit Linked Insurance Scheme


• Purpose of scheme is to provide life insurance benefits
• To employees already covered under Employees' Provident Fund Scheme/ Employees'
Pension Fund Scheme
• Contribution by Employer
• Employer has to pay
• Contribution equal to 0.5% of total wages of employees.
• Administrative charges of 0.1% of total wages are also paid by employer.
• Employee does not contribute any
amount to this scheme.

Amount of claims
• If any employee dies during employment,
• Maximum assured benefit up to Rs 7 lakh to be paid to the nominee or legal heir of the EPF
member if death occurs while in service.
• Minimum assurance benefit is of Rs 2.5 lakh in case the deceased member was in continuous
employment for 12 months prior to his or her death.

Administration
• Administration of the scheme given under this act is done by the Central board, State board,
and regional committee, a chief executive committee appointed and constituted by the central
government

Structure of EPFO
• The Act and all its Schemes are administered by a tripartite Board called
Central Board of Trustees (EPF).
• It has representatives of Government (both Central and State), Employers and Employees.
• The Board is chaired by the Ministry of Labour and Employment, Government of India. The
Central Board of Trustees (EPF)
operates 3 schemes.

Penalties
For avoiding any payment whoever knowingly makes or causes to be made any false statement
or false representation - Imprisonment less than 1 Year or Fine
of Rs. 5000 or Both

An employer, who contravenes or makes default in complying with the provisions of the
payment of inspection charges, administrative charges- Default of payment of employees
contribution – 1 year imprisonment and Rs. 10000 Fine.

Other Case: 6 Months Imprisonment and Rs 5000 Fine

Max. Imprisonment – 3 Years

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