Facing PF Registration Issues: Should We Register Now or Start Fresh?

Dear All,

Can anybody suggest me on this situation? A company incorporated in 2006-07 has 150 employees. As of now, it has not registered under any PF, ESI, PT Act, and has also not filed its Annual Returns with ROC (unknowingly).

Now the company has roughly calculated the PF Liability, i.e., Rs. 30 Lakhs. Since it has not deducted any amount from employees, it doesn't want to contribute such a huge amount.

Can this be rectified by registering now? Will the Dept of PF/ESI/PT ask for the previous data? What kind of penalties can be attracted now?

Should the company go forward and register, or should it silently wind up and format a new company?

I am confused. Please help me out.

Hi,

You just find out when the employee numbers crossed 20+, from that day onwards, PF is applicable. As you are going for the first time for the PF Registration, you have an option to calculate PF in this manner. If any employee's basic salary is more than 6500, make it restricted to 6500 for both employee and employer contributions. So, on average, employee/employer contribution is 780 (6500*12%). You can also request the PF Authority to waive the Employee contribution amount for that period, as you have not deducted from employees' salaries.

Regards,
Rsritha

Dear Members,

I think we need to set the record straight...

The liability of the employer for compliance under the PF Act is from the date of applicability of the act to the establishment. It cannot be wished away. The employer is under obligation to remit their part of contributions under Section 6 together with employees' contribution, administration charges, and inspection charges.

Section 8A of the act authorizes the employer to deduct the employees' contribution from the wages of the concerned, as a statutory contribution payable or as debt.

The PF inspectors are entitled to charge the employer for non-compliance under Section 7A of the act. Such proceedings can be very tormenting, and the employer could feel harassed, besides facing the auction of assets by PF authorities to realize the workers' legitimate PF dues.

Sonuayesha, it is my considered opinion that:

1. You should approach the territorial RPFC with all relevant records and come clean with facts; assess your liabilities and deposit the money.
2. Notify all employees in respect of whom you have deposited PF dues to come and deposit their share of contribution in your office. In case they fail to do so, initiate recovery proceedings in a court of law.

As an HR professional, you should always render sound advice, which will deliver mental peace to the employees and employers alike. Any suggestion from any quarter for denying legitimate dues to employees should be summarily rejected, as your loyalties rest with employees during such decision events.

Dear All,

First of all, as per the rules, you are required to assess all liabilities and remit the money accordingly. Currently, you have not deducted the employee's share. However, if you only have a few employees from a certain date onwards for whom the employee share has not been deducted, you can request a waiver from the PF commissioner for all or at least the employee's share. While it may be difficult to obtain such a waiver, it is not impossible as per the rules.

Best Regards

I agree with Mr. Murthy; you need to come clean to the authorities, and they will help you to rectify all matters.