Amnesty Scheme Planned for PF Defaulters

To cover cos that evaded EPFO enrolment to avoid fin responsibility or defaulted on depositing employee contributions

The Employees’ Provident Fund Organisation (EPFO) is readying an amnesty scheme for companies which have evaded enrolment with the retirement fund body to avoid additional financial responsibility or defaulted on depositing the contributions of their employees with it.

The scheme could be launched along with the employment-linked incentive (ELI) schemes by the end of 2024, said people familiar with the development.
The move would help attract enrolments under the ELI schemes, enhance formalisation of the workforce and ensure social security benefits to more workers, they said.

Currently, establishments with at least 20 workers have to register with the EPFO to contribute towards provident fund, pension and insurance benefits for employees under the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952. However, the majority of small and medium enterprises keep their headcount below 20 to avoid the EPFO threshold.

The default period, eligible for a waiver, could be from 2017 till 2024, the people said, adding that, if approved, the scheme would initially run for six months from the launch of the ELI scheme.

The proposed amnesty scheme could be tabled before the central board of trustees (CBT) of the EPFO at its upcoming meeting on Saturday, said a senior government official, who did not wish to be identified.
As per the contours of the scheme being firmed up, the government could waive the entire employees’ contribution, if not collected by the employer, during the default period. Employers, on the other hand, could have to pay a minimum contribution to the EPFO for the default period which could be as low as ₹1 per employee per annum, according to the official. However, if the employers had deducted the provident fund contribution from the employees’ salary but never deposited the amount with the retirement fund body, they will have to deposit the entire amount along with the penalty as per the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 within the stipulated time decided by the EPFO.

“The fine print is being discussed and we hope to finalise the scheme over the next few days,” the official said, adding that the scheme would need the approval of the CBT before it is launched.
The EPFO will provide a self-declaration form for establishments which will be the basis for availing benefits under the scheme.

The three ELI schemes, announced in the budget for this financial year, will be implemented by the EPFO, which is under the administrative control of the labour and employment ministry. The ministry is awaiting Cabinet approval for the schemes and expects to launch them before the end of 2024.
Meanwhile, the EPFO has conducted the trial run for enrolment under the proposed schemes as well as linkage of data with stakeholder ministries.