Labour Law & Hr Consultant
Industrial Relations And Labour Laws

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Since the SC judgment on PF applies retrospectively, are companies paying the arrears of PF on their own? Please share your company practise.
It is the problem faced by every existing employer already under the purview of the EPFMP Act,1952. The SC judgment is basically and totally interpretative and has not set down any new rules. Therefore, retrospective adherence becomes an automatically implied compliance. But there are some practical problems associated with such retrospective compliance. If it is the date of coming into force of the Act for those establishment in existence on that date or the date of application to the establishments which became subsequently under the Act's purview, tracing back the past records, collection of employees' share from the past members, question of computation of interest for the entire period of default and the like are the practical issues . I have no idea about any move of the EPFO so far in this regard. I think it's the status quo so far as almost all employers are concerned.
Well said sir. Owing to the practical difficulties of assessment of omitted wages, the interest and damages thereon, and considering that the employers will have to generate a huge money to pay the contributions on the omitted wages which would certainly include employees'share which cannot be recovered from the employees, the issue needs to be addressed separately. It is true employer should have contributed contributions according to law and in many cases the law enforcement authorities, ie,the PF Enforcement Officers, have not given a proper direction as to what constitutes PF qualifying salary.It was very late that they themselves started understanding the actual meaning of basic wages. Therefore,partially the responsibility falls on EPFO also. Another important thing is that whenever there is any interpretation of law the EPFO use to issue circulars to employers. In this case so far no such direction has come. It is understood that they have decided to make a cut off date for that. So far no communication has come and as such employers are remitting their contribution as usual.
But my advise is that we should not wait for the communication from the EPFO but shall start contributing on actual. To that extent our liability towards interest and damages could be reduced.

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