Korgaonkar K A
Service As Dgm-hr/legal
Asst. Manager-admin
+1 Other

Dear All,

Given below is a new article published in today’s TOI.

Employees with EPF benefits, in case of a complaint, will now have to prove that their employers had deducted the statutory dues while giving them salaries. Moreover, investigations into allegations of default will now be conducted only if it pertains to the past seven years only.

The EPFO , which manages lifetime savings of 6.15 crore individuals, has just made life tougher for workers. Employees will now have to prove that their employers deducted the statutory dues while giving them salaries, a move that will further benefit construction companies and contractors in particular who often claim that they have paid salaries to thousands of workers without actually transferring it.

What is going to add to the woes is EPFO's decision to limit investigations into allegations of default only if it is for the past seven years. "It has been observed that open-ended assessment, inquiries and investigations serve no real purpose. Moreover, such inquiries often do not result in the identification of beneficiaries and only tend to harass the employers and establishments. It is accordingly directed that no inquiry or probe shall ordinarily go beyond seven years that is, it shall cover the period of default not exceeding preceding seven financial years. It is to be ensured that compliance actions are initiated in time and there is normally no reason for extending the scope of investigation and assessment inquiry beyond previous seven financial years," central PF commissioner R C Mishra said in a circular issued on November 30, the day he superannuated.

While trade unions are protesting against the move, the same six-page circular also has a clause on lump-sum assessments dealing with establishments that hire "workers of migratory nature" on short-term project-based employment, a reference largely to the construction and real estate sector.


In a country which has precious little by way of a social safety net, the provident fund is one of the few such fallback options, even if only for those in the organized labour force. Any change in the rules governing this scheme must therefore be tested on the touchstone of whether it enhances the safety net or weakens it. Imposing a time limitation on when defaults can be investigated clearly weakens it. Most of those whose savings lie in the EPF do not regularly track whether money is being deposited in it by their employers and, if so, whether it is as much as it should be. They may well discover a default well after it happens. Clearly, they cannot be left with no scope for redress due to a time limitation clause.

This is for your information and discussion.

Thanks and regards.

Keshav Korgaonkar

From India, Mumbai
Thanks keshav ji for such a quick information to all of us.
I personally feel that the move is quite reasonable. 7 years time is more than enough in the era of Net.
Now, the employees are required to be more vigilant and keep a watch properly and take action within the time limit.
By this move the employers will get relief to have unnecessary records keeping for years together.

From India, Delhi
Thanks Keshav for this update!! But this move of EPFO is against the interests of employees. and now the burden of proof is shifted on employees.
Though RTI may be of some help but it will unnecessarily harasse employees particularly when they move to other cities for switching over to new job.
Please comment!!

From India, Delhi
The limitation does not make much difference, as 95 percent of present cases are
below that period only, regarding identification of the beneficiaries in the same
circular it was stated that, employer can be prosecuted for non submission of
information under section 14 of Employees Provident Funds and Miscellaneous
Provisions Act, 1952 , therefore that was taken care. However difin
itely in a span
of 7 years PF inspections will be conducted, which also can be taken into
consideration. However regarding construction workers more transparent
policy required to come
Edify compliance planners

From India, Hyderabad
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