Are We Liable for EPF Admin Charges Before Our Firm's Registration? Seeking Advice

EPF Admin Charge Applicability for Unregistered Firms

I have a question regarding the applicability of EPF admin charges to a firm that has not registered with the EPF. My company reached the required employee strength in April 2014, but all employees were above the EPF ceiling. The contributions for employees engaged through a contractor were remitted by the contractor, so we did not register with the EPFO.

During 2017-18, the company changed its policy, eliminated all contractors, absorbed the employees engaged through a contractor into its payroll, and registered with the EPFO. We are now regularly remitting EPF contributions. After an inspection, the department is demanding minimum admin charges from April 2014 to March 2017. Are we liable to remit these charges even though we were not registered during that period? Please advise.

On the 1st instance, the minimum administrative charges are payable by the establishment that was liable to pay EPF in that specific period. However, if it is found that the contractor had no other contract other than this principal, then the department establishes that the contractor is part of the principal only. If you can provide Form 5/7/12/13/14 of the contractor in your support, showing that you have fully complied with the CLRA Act, then the department will initiate proceedings against the contractor; otherwise, the principal is liable.

In any establishment, if more than 20 employees are engaged directly or indirectly, irrespective of whether they fall under PF deduction criteria or not, the establishment needs to be registered under the EPF Act of 1952. Thereafter, if there are no employees who fall under PF deduction, the establishment has to generate a challan and pay a minimum admin charge of Rs. 500 per month.