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hi HR fraternity !!:)

I have a doubt about PF penalities & damages. If one month contribution has not paid by the company, what is the rate of penality and when it has to be paid. If the contributions has not been paid for the 4/5 months due to company loss, what is the action to be taken by the PFO. Is the due amount paid at a time or Installments, If so when it has to be paid, in the next month or end of the year?

Please help me in this regard.

Thanking you


From India, Hyderabad
if once an employee is covered under pf act he has to pay the contributions irrespective of increments but he has the choice to decide which percentage of amount to cover under pf.
From India, Hyderabad

If he is cover under PF before Rs.6500/- he is eligible for PF continuesly. but we can restrict up to 6500/- for employer contribution i.e.780/- per month
From India, Coimbatore

Dear Mr. Shinkar,

Para 26-A of the Employees Provident Funds Schemes, 1952 provides for retention of membership.

Dear Mr. Srinivas,

For non payment of contributions payable by the employer, Interest shall be collected by the EPF Organisation as per section 7 Q of the EPF & Misc Provisions Act, 1952. I do not know what exactly is the rate of interest but it should not be more than the lending rate of banks. Similarly, damages are to be paid u/s 14 B of the Act.

Besides the above, failure to pay contributions may also lead to prosecution against the employer and if employees' share of contribution collected (deducted from the salary) is not paid, then the employer shall be convicted for criminal offence of misappropriation of funds.

Financial loss shall not be considered as a reason for delay in payment of contributions. However, if the company is running in losses for the last five years and the same has been declared as sick industrial undertaking for which a scheme of rehabilitation has been sanctioned by the Borad for Industrial and Financial Reconstruction, waiver of damages is possible.

For payment of arrears of contribution, installment scheme shall be obtained from the Asst. Provident Funds Commissioner under an undertaking that the arrears shall be paid in installments along with the current contributions. For this, usually, the EPFO will take a bank guarantee for one month's installment. If any installment or current contribution is not paid, the facility will lapse and thereafter the revenue recovery proceedings will be initiated for recovery of the whole amount at once.



From India, Kannur
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