I work in a small partnership firm that engages in a security and housekeeping personnel business. The firm has just three people who run the office, including me, and their job profiles are: a) Managing Partner, b) Chief Operations Officer, c) Chief Financial Officer. The firm entrusted me with the latter option, but in reality, it’s just a description with no actual powers whatsoever. The reason I write this post is due to a peculiar problem that was ignored (my assumption) for a long time and has now snowballed into a major issue.
The EPF Registration Issue
The firm, in order to be eligible to get contracts, tried to obtain every license and registration necessary for the smooth running of the business. In this process, it applied for EPF registration, with no workers to show, and somehow got it by adding 19 members and then putting them on the excluded list. So, in a sense, what they seem to believe is that they got the EPF registration and have no people to show for it. I found that information confusing. Later on, when we started getting business contracts and eventually hiring a few workers, it was found that the workers’ EPF money was not being credited to the accounts of the respective workers. When questioned, the COO answered that they did not meet the criteria of 20 people to deposit on the very first instance. I found that shocking and tried to explain to him that the 20 people criteria was for registration purposes only, and after registration, even if the number falls below 20, the EPF can still be paid, but it fell on deaf ears.
Current Situation and Dilemma
This month, i.e., June 2016, the company finally had the required numbers to make the "payments," but the dilemma is, the company started doing business in January 2016, and their EPF and ESI monies were being deducted from January itself, and as mentioned above, they were not deposited.
Summary of the Situation
1. The firm had around 8-16 employees from January to mid-May 2016.
2. The firm crossed 20 employees this June 2016.
3. The firm cut EPF and ESI for January.
4. The ESI registration is still not made; I wonder what the problem is this time.
5. The client is now asking for EPF and ESI challans, which the firm doesn’t have.
Now, my question is: what are the implications of the above scenario, and what is the solution to it? On the same note, I have calculated their EPF and ESI on the minimum wage rate prevalent in Odisha. Since they are wage workers, they get paid on a day-to-day basis and are not paid for any leave taken. The rates have been calculated on minimum wages * 26 days divided by 26 days * the days they worked. I hope this long post contains all the relevant information needed, and I can provide more information if needed to make this more conclusive.
Thank you in advance.
The EPF Registration Issue
The firm, in order to be eligible to get contracts, tried to obtain every license and registration necessary for the smooth running of the business. In this process, it applied for EPF registration, with no workers to show, and somehow got it by adding 19 members and then putting them on the excluded list. So, in a sense, what they seem to believe is that they got the EPF registration and have no people to show for it. I found that information confusing. Later on, when we started getting business contracts and eventually hiring a few workers, it was found that the workers’ EPF money was not being credited to the accounts of the respective workers. When questioned, the COO answered that they did not meet the criteria of 20 people to deposit on the very first instance. I found that shocking and tried to explain to him that the 20 people criteria was for registration purposes only, and after registration, even if the number falls below 20, the EPF can still be paid, but it fell on deaf ears.
Current Situation and Dilemma
This month, i.e., June 2016, the company finally had the required numbers to make the "payments," but the dilemma is, the company started doing business in January 2016, and their EPF and ESI monies were being deducted from January itself, and as mentioned above, they were not deposited.
Summary of the Situation
1. The firm had around 8-16 employees from January to mid-May 2016.
2. The firm crossed 20 employees this June 2016.
3. The firm cut EPF and ESI for January.
4. The ESI registration is still not made; I wonder what the problem is this time.
5. The client is now asking for EPF and ESI challans, which the firm doesn’t have.
Now, my question is: what are the implications of the above scenario, and what is the solution to it? On the same note, I have calculated their EPF and ESI on the minimum wage rate prevalent in Odisha. Since they are wage workers, they get paid on a day-to-day basis and are not paid for any leave taken. The rates have been calculated on minimum wages * 26 days divided by 26 days * the days they worked. I hope this long post contains all the relevant information needed, and I can provide more information if needed to make this more conclusive.
Thank you in advance.