EPF

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 August 2010 HAI FRIENDS.
I WANT TO KNOW ABOUT THE APPLICABILITY OF EPF PROVISIONS(LIMIT, NUMBER OF EMPLOYEES?ETC). ITS A PROPRITAORY FIRM DOING WORKS CONTRACTS(ELECTRICAL WORKS CONTRACTS FOR A GOVT. COMPANY).PLEASE ANSWER IF U CAN
THANKS IN ADVANCE

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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11 August 2010 The Employees’ Provident Funds and Miscellaneous Provisions Act, provides for compulsory contributory fund for the future of an employee after his/her retirement or for his/her dependents in case of his/her early death. Its 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.

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 up to 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

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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11 August 2010 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. –the employer contribution is 10% of the basic wages, dearness allowance and retaining allowance, if any.
b. In case of all other establishments’ employing 20 or more person- the employer contribution is 12% of basic wages, dearness allowance and retaining allowance, if any.
 A part of the contribution is remitted to the Pension Fund and the remaining balance continues to remain in Provident Fund account.
 Where, the pay of an employee exceeds Rs.6,500 p.m., the contribution payable to Pension Fund shall be limited to the amount payable on his pay of Rs.6,500/- only.
 “Basic wages" means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him but does not include:

(i) the cash value of any food concession;
(ii) any dearness allowance, house-rent allowance, overtime allowance, bonus, commission or any other similar allowance.
(iii) any presents made by the employer;
For the purposes of this section dearness allowance shall be deemed to include also the cash value of any food concession allowed to the employee.
Retaining allowance means an allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working for retaining his services.

The contribution to the fund is to be deposited by the employer by 15th of the next month.

Payment of contributions.

(1) The employer shall, in the first instance, pay both the contribution payable by himself and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member.

(2) In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee and shall pay to the principal employer the amount of member’s contribution so deducted together with an equal amount of contribution and also administrative charges.

(3) It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges.

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