How Can We Resolve EPF Coverage Issues for Short-Term Laborers in Our Company?

Dear All,

We are a contracting company. We fill manpower based on the project size, and it's a short-term commitment with the laborers under daily wages. We have not covered them under EPF. However, EPF inspectors visited our office and checked all our records, including the balance sheet. They asked, based on the balance sheet, to pay the EPF with a penalty for the outstanding balance compared to the salary register and balance sheet.

All the laborers receive a minimum of Rs. 400 per day, and they have an average basic salary of Rs. 12,000 per month. According to the EPF Act, they are exempt from EPF coverage with the employer's consent under the EPF Act.

We did not submit Form 11 (Declaration by a person taking up employment in an organization with EPF). However, this form does not have a column to indicate that EPF coverage is not required for me (the worker).

Could someone assist me in resolving this issue and guide me through the declaration procedure?

Thank you,
K K Dhinesh Jebaraj
[Phone Number Removed For Privacy Reasons]

EPF & MP Act Coverage Requirements

As per the EPF & MP Act, all employees drawing wages up to Rs. 6,500 per month, and those employees who have been members under the Act but have not withdrawn full benefits as per Section 69 of the EPF Scheme, irrespective of wages exceeding Rs. 6,500, are required to be covered under the Act, subject to the coverage of your establishment under the Act.

Interact with each worker to understand whether they were members of the Fund earlier and if so, whether they had withdrawn all money. Secondly, check the salary sheets to determine whether they were drawing wages more than Rs. 6,500 per month from the date of joining your company if they worked for the whole month. If they were members earlier but withdrew the balance and their normal monthly wages were more than Rs. 6,500, the workers are not required to be covered.

If these workers are not required to be covered, action to get Form 11 may be initiated with retrospective effect and kept on your records. Lapses in submission can always be condoned.

Proceed cautiously but judiciously and rectify the situation.

Best of luck.