Sub:EPFO Circular dated 8th October 2013
Recent Circular No C.III/110001/4/3 (71)Misc./2013/DL/12802 dated 8th October 2013 issued by EPFO to all Regional P.F. Commissioners is creating ripples amongst the PF remitters and most particularly the Staffing Industry.
On going through the circular we find that the circular is addressed to various Government Departments, the Undertakings and Autonomous bodies (Principal Employers-PE )for the activities like watch-ward, Housekeeping, data entry, etc. The intent of the circular appears to be aimed at Principal employers who pay the contribution on the whole of the salary or Rs.6,500/- whichever is lower and make that component part of the payment to the Contractor whereas the Contractor splits up the wage and deposit the contribution on a less basic salary. Therefore, the EPFO is asking PE’s to check up whether the contractors are depositing the contributions collected from the PE. Special attention may be made in para 5 & 7 of the Circular which is extracted below:
\" 5. Instances have come to notice that the placement agencies and security agencies, which provide guards and other personnel to Government Departments, Undertakings and Autonomous Bodies often take employer’s contribution on full wages from these employers and then bifurcate the wages of the personnel provided by them in to basic wages and various other allowances which do not form part of basic wages to evade the provident fund. This diversion of residual employer’s contribution tantamount to pilfering of provident fund money. Thus, Governments Departments, Undertakings and Autonomous Bodies, which settle the periodic bills of agencies and contractors, unwillingly become a party to this pilferage.
7. In this background, all the Regional Provident Fund Commissioners In-Charge of Regional/Sub Regional Offices are advised to start a dialogue with the Government Departments, Undertakings and Autonomous Bodies functioning under your jurisdiction about their duties and responsibilities while engaging personnel for watch-ward, housekeeping, data entry etc. through various agencies and contractors to check such pilferage of provident fund monies. The Officer-in-charge are also advised to collect the details of personnel engaged through various agencies and contractors from these Government Departments, Undertakings and Autonomous Bodies and check with the records available in their own offices about such agencies and contractors. Wherever pilfering of provident fund money is noticed, immediate action shall be initiated against the erring agencies and contractors to check such unhealthy practices harming the interest of the workers.”
In the light of the above the move of the Department is to ensure that there is no pilferage of PF contribution and to initiate action against the erring contractors more particularly serving various Government Departments, the Undertakings and Autonomous bodies who receive more from the PE and remit less or who do not remit at all .Those who are compliant need not fret on the Circular.
If you needs a copy of the Circular on request we can forward a copy.
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry