Provident Fund Loophole: How Should We Respond to Companies Skipping Worker Contributions?

The provident fund (PF) department has voluntarily given up its powers to take action against employers who fail to deposit workers' dues unless it can name workers whose savings are in danger, evoking protest from union leaders and labor experts who said this could protect companies that fail to make PF contributions.

The directive also sets a seven-year limit for probing cases of PF default by companies that are required to remit 24% of a worker's salary into their provident fund accounts till they retire.

What are your views on this?

This is very unfortunate! As it is, the PF authorities lacked the power to enforce the Act; but now it will encourage small and dubious companies to pocket the contributions with impunity. Provident fund is meant as the last resort of subsistence for an employee; however, it will no longer remain so. If the government is not interested in taking responsibility for the fund or its implementation, then it's better to scrap the Act altogether rather than let the wolves loose among the lambs!

Warm regards.

Very true! But this is an injustice. What we can do is to make people aware of this so that they take their salary breakup very seriously and negotiate on the in-hand salary, not on CTC.