pritamraju
A very warm welcome to everyone who views this post,
I work in a small partnership firm that engages in a Security and House Keeping personnel business. The Firm has just 3 people who run the office, including me and their job profiles are a) Managing Partner, b) chief operations officer, c) chief financial officer, the firm entrusted me with the latter option, but in reality, it’s just a description, with no actual powers what so ever. The reason I write this post is a peculiar problem that was ignored (my assumption) for a long time and has now snowballed into a major problem.
The firm in order to be eligible to get contracts, tried to get every license, registration necessary for the smooth running of business and in this process, it applied for EPF registration, with no workers to show, and somehow got it by adding 19 members and then by putting them on the excluded list, so in a sense, what they seem to believe is that they got the EPF registration and have no people to show for, I found that information confusing; later on when we started getting business contracts and eventually hiring a few workers, it was found that the worker’s EPF money was not being credited to the accounts of the respective workers and when the same was questioned, the COO answered me that they did not meet the criteria of 20 people to deposit on the very first instance, I found that shocking and tried to explain him that 20 people criteria was for registration purposes only and after registration even if the number falls to below 20 the EPF can still be paid, but it fell on deaf ears, in this month, i.e June,2016 the company finally had the required numbers to make the ”payments” but the dilemma is, the company was started doing business since January 2016 and their epf and esi monies were being deducted from Jan itself, and as mentioned above they were not deposited. So in short I summarise this post with the bulleted notes below:-
1. The firm got around 8 -16 from Jan to mid May, 2016.
2. The firm crossed 20 this June, 2016.
3. The firm cut EPF and ESI for Jan.
4. The ESI registration is still not made; I wonder what the problem was, this time.
5. The client is now asking for EPF and ESI challans, which the firm doesn’t have.
Now, my question is what are the implications of the above scenario and what is the solution to it?
On the same note, I have calculated their EPF and ESI on the minimum wages rate prevalent in Odisha.
Since they are wage workers, they get paid on day basis and are not paid for any leave taken, the rates have been calculated on minimum wages *26 days divided by 26 days * the days they worked.
I hope this long post contains all the relevant information needed, and I can provide with more information if needed to make this more conclusive.
Thank you in advance.

From India, New Delhi
nathrao
3131

Deduction of EPF and ESIC contributions and non deposit would make the company and its concerned officer subject to fines/penalties and legal action.
Please read Penal Provisions under Section 84 to 86 of ESI Act, 1948 (as amended)
EPF act
"Section 14. Penalties.
X X X X (2-A). Whoever contravenes or makes default in complying with any provision of this Act or of any condition subject to which exemption was granted under Section 17 shall, if no other penalty is elsewhere provided by or under this Act for such contravention or non-compliance, be punishable with imprisonment which may extend to three months or with fine which may extend to one thousand rupees, or with both."
Please advice your company to comply with EPF/ESIC rules and in case they are not willing,look for alternate employment as you will have to face PF authorities in our official capacity.

From India, Pune
pritamraju
Thank you for your kind reply, can you please advise me how much penalty has to be paid? I had already said the same to them about the penalties earlier, but as said, it fell on deaf ears, they followed an ill-conceived thought that they can get away by stating a mere glitch in the formalities put "barriers" on their way, but having said that, once EPF is registered, it is to be deposited regardless the fact whether the employee numbers are more than or equal to 20 right?
From India, New Delhi
pritamraju
Thank you very much for the reply, I will keep you posted on what happens next, the thing is that the employers are good and maintain a healthy rapport with the personnel, but they did do a blunder in the case of EPF and ESI, ignorance can be a pain.
From India, New Delhi
nathrao
3131

Go to a consultant and work out amount to be paid and pay it up,including fines etc.
this will avoid any problems with PF department.
Today you have good relations with guards,but if some problem comes up,it will not take time for PF/ESIC department to hear of non deposit of PF contributions etc and legal troubles will start.

From India, Pune
pritamraju
Perfectly put, but it seems all my concern falls in deaf ears here, perhaps the only thing I can do is wait and watch, what they do, and hope their inaction doesn’t cost me my career.
From India, New Delhi
bijay_majumdar
365

@Mr.Pritam raju,actually speaking,this kind of ill practices are common with contracting agencies.As in your case I suggest be careful and not to be a part of such defaulting agencies.If you are the authority in such cases you will be held responsible for all illegal matters happening.while others will simply enjoy the benifits.further as member suggested,pls pay all dues as applicable at the earliest and avoid problems in future.Also educate clients about seriousness of non compliance issues.
Thanks

From India, Vadodara
nathrao
3131

Contracting agencies and enforcement agencies have a symbiotic relationship.Each feeds upon the others shortcomings.
There are well intentioned GOI rules for labour welfare,but unknowingly or intentionally business owners try to avoid the expenditure on social welfare payments.
That way they are forced to hide things from enforcement agencies or go the wrong way in tackling agency checks.
Best way out is to be aware of latest rules and comply with them to avoid any type of legal issues or enforcement agency penalty.

From India, Pune
gannahope
68

K
Its BETTER TO SEND THIS INFORMATION TO NEAREST EPF REGIONAL OFFICE AND ESI MANAGER
AND GET IT BE PROSECUTED UNDER SEVERAL VIOLATIONS OF EXISTING LAWS...AND MOREOVER CHEATING CASE DONE AGAINST WORKERS..
PLS. GO AHEAD..
DAMN VIOLATION OF LABOUR LAWS...

From India, Nellore
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