Understanding PF PMPRY: How Often Do Employers Get Reimbursed and How Is Fraud Prevented?

I have come across the attached notification where for employees having a PF wage below Rs. 15,000/-, 8.33% of the contribution amount by the employer will be reimbursed to the employer. This means the Government of India (GOI) will bear the expenses of up to 8.33%.

Scheme Details

Some pointers:

1. Freshers or employees having no PF and UAN number earlier will be taken into consideration.

2. The scheme is applicable from 1st of April 2016, with the base taken as 31st March 2016.

3. Only if an employer had an increase in the number of employees from the base date will they be eligible for this benefit.

4. Required for the scheme are the LIN Number of the employer, Aadhar number of the employee, and registration with www.pmrpy.gov.in.

An attachment is provided for additional information.

Queries for Discussion

Request fellow members/seniors to shed some light on the following queries of mine:

1. What will be the reimbursement frequency to the employer?

2. Some employers may manipulate the data by bringing in fake employees; how will the PF monitor that?

3. Also, what will be the minimum tenure the employee will have to be part of the system? Are there checks in place?

Regards

PMPRY Scheme Overview

The PMPRY scheme covers both old establishments already registered with PF and new establishments registered with PF from 1st April 2016. It applies only to new employees. A new employee is defined as someone who has never worked with an organization covered by PF and had no UAN in the past.

In the case of old establishments, the reference base to determine new employees for 2016-17 is 31st March 2016, and for 2017-18, it is 31st March 2017, and so on. For new establishments registered with PF on or after 1st April 2016, the reference base is zero, as they were not in existence before that date.

Employers must add new employees to the reference base as of 31st March 2016 or 31st March 2017, and so on. Each establishment will be allotted a LIN (Labour Identification Number) for primary reference purposes.

The government will bear the employer contribution to the extent of 8.33%, while the employer must remit 3.67% to PF for all industries other than the apparel sector. For the apparel sector, the government will also bear the 3.67% of the employer contribution in addition to 8.33%.

This benefit will be available to employers in respect of new employees, as defined above, for a period of three years only if the new employee continues with the same employer for such a period. The benefit is effective from August 2016.

Hope this provides some clarity.

Regards, B. Saikumar

Thanks for the reply. However, my question is whether there will be a reimbursement of 8.33% by the government. If yes, then when will they do it.

Moushami,

The procedural details will be worked out by the PF as the Scheme does not refer to it. There may be two ways: 1) the Govt/PF may directly reimburse the employer, or the Govt. may directly pay the 8.33% to PF, which may collect only 3.67% from the employer. You may await PF circular or contact the PF department in this regard. Other experts may shed light on this.

B. Saikumar

Hello Sir/Madam,

I want to know about the PMPRY scheme. How do I calculate the PF amount? Is it based on the gross salary or the basic salary + DA?

Kindly confirm.

Regards,
Santosh

Please see the attached EPFO notification with details regarding PMPRY.

Dear Moushumi B,

With reference to your query, now 8.33% share would be automatically calculated while generating the challan, and the same amount would be directly paid by the GOI. You can see that the amount is excluded in the challan amount as well. That is, the total amount minus the excluded amount equals the net payable amount.

Hope your query is clear.

Dear B. Saikumar Ji,

Is it necessary to register all the employees in PMRPY for the benefit of 8.33%? I already have 600 employees registered in EPFO, and every month we deposit EPF for our employees.

Many of these employees have left work. So, is it necessary to register all employees or only active members in PMRPY?

Please help.

Dear Vishal, you must register all employees whose UAN is generated on or after 1st April 2016, provided their gross salary is below INR 15,000 per month. Currently, 8.33% of the employer's share is automatically paid through the PMRPY scheme when generating the monthly contributions. The reimbursement of all previous months since April 2016 will be released by EPFO, probably in April 2018, including the calculation of interest on the said reimbursement. EPFO has already started communicating with registered employers to seed their bank account details and to confirm these (if some have not done the same during registration at PMRPY) for initiating these reimbursements.

Could anyone please clarify whether the PMRPY scheme could be made applicable to a Manpower Supply Contractor who serves different clients.

In case a contractor is eligible for the scheme and experiences a drop or fall in employment from the reference base, is it correct that the establishment will not be eligible for the scheme in months where employment is below this reference base?