Navigating EDLI Claims: Can Unpaid Leave Affect Eligibility After an Employee's Death?

Dear Seniors, please let me know what's wrong with this issue and your view on it. One employee of our company died on 23.03.19 due to natural causes. However, before his death, he was on unpaid leave from 01.03.19 until his passing. The date of exit was 23.03.19 with the reason stated as death.

EPF Office Rejection of EDLI Claim

The EPF office rejected the EDLI claim citing that the monthly contribution of the deceased member was paid by the employer only up to 03/2019, indicating that the wages were for February 2019, whereas the member passed away on 23.03.2019. Employers are expected to pay contributions for the month of 04/2019. This implies that the member did not die while in service, as EDLI benefits are typically paid to employees who pass away during their service period.

Please advise if the member's spouse will be eligible to receive the EDLI claim or not.

Dear Shashanksri ji, in my view, it is a wrong rejection. For the EDLI claim, there are two criteria. One is that the deceased should be a member of the PF. The other is that the "assurance benefit" is linked to the average balance during the 12 months before the death in the Provident Fund account of the deceased. You are advised to write to the RPFC and resubmit the form. Otherwise, take the grievance to Nidhi Aapke Nikat.

Dear Mr. Shashank, please verify the March 2019 ECR filed by your company. Is the deceased employee's name mentioned? Are the NCP (Non-Contribution Period) days specified for the deceased employee? Has the employer paid the EDLI (Employees' Deposit Linked Insurance) contribution for the deceased employee?

If the employee was on loss of pay or non-contribution days, the employer is obligated to pay the EDLI contribution at a rate of 0.50% on the EDLI wages.

Thank you.

EDLI Benefits and Employer's Responsibility

For EDLI benefits, the employer needs to provide a certificate to the EPFO stating whether the deceased employee was on the company's payroll or not. If the employee was on the company's payroll, their family would be eligible for EDLI benefits. If not, they will not be eligible. The EPFO will make a decision based on the certificate provided by the employer.

Handling Non-Payment Situations

In cases of non-payment for a specific month, it should be stated that the member was on loss of pay, even though they were on the company's payroll and did not attend the office due to illness.

Understanding Exit Date and Last Working Day

This is a serious issue. There is a difference between the exit date and the last working day. If the employee had worked until 23/3/2019, the last working day should be 23/3/2019. However, if you put that date as the exit date, the dependents of the deceased will not get the EDLI benefits, which are payable only if the death happens while in service. But if you put the 24th as the exit date, he would have received it.

The above philosophy of putting a later date will not be applicable in the case of an employee leaving your organization and joining another organization where PF is covered. Consider that the employee has worked in Company X until the 23rd and joins Company Y on the 24th. In this case, the last working day should be the exit date in Company X because if you put the 24th as the exit date, he cannot put the 24th as the joining date in Company Y. This is actually an issue that can cause future confusion. Therefore, ideally, in death cases, a date later than the date of death should be put as the exit date, whereas in the case of resignation, the date should be the last working day.

Handling EDLI Claims in Case of Death

If the last month's payout was zero, his contribution to EDLI should also be zero. Therefore, the ECR will not prove that his death happened while in service. You have to establish that he was hospitalized and since he had no leave to his credit, he was approved to take leave without pay and unfortunately, he passed away while undergoing treatment. Alternatively, if his death is not due to any illness but he had taken leave for some other reason, that can also be noted. But what is important is that there should be a leave letter and the death should occur during the period of leave. You should also produce the muster roll with his name appearing among the employees for the month of February (the month preceding the month of death) and March (the month of death). In case the employee was a member of ESI, the contribution history for February, March (with nil contribution), and April (with a note that he left/expired) shall be useful. In case covered by medical insurance, any communication/monthly returns (deletion of employee) to the service providers shall be taken as proof to show that he was an employee at the time of death.

Requesting Clarification from EPFO

To get the above clarified, you will have to write to the EPF Organization and request an opportunity to be heard. Once the EPFO is satisfied, the dependents will receive the EDLI benefits. Therefore, please write to EPFO and ask for a personal hearing or an opportunity to present evidence to establish that he was an employee and the death occurred while in service.

I request the employer to check the March-19 ECR and the specific UAN number displayed there. If they have filed ECR with the total NCP of the specific UAN, then it might be grounds to seek a solution from EPFO. However, if the UAN was not included in the ECR filing, then EPFO has the right to reject the claim.

Reconsideration of EDLI and ESIC Benefits

In case the records with the employer are correct and up to date, as mentioned by the kin of the deceased employee, they can appeal to the PF office for reconsideration of the EDLI. The sum they offer as the benefit is usually Rs. 1,00,000. If the employee is covered under ESIC, they should receive Rs. 10,000 as burial charges.

EDLI Assurance Amount Details

Yes, the maximum amount for EDLI is Rs. 6 lakhs. The minimum amount is Rs. 2.5 lakhs. If a member has submitted the nomination as instructed, the assurance amount shall be disbursed to the nominee or nominees. If a nomination is not available, the assurance amount shall be equally distributed to the family members of the deceased member.

Minimum Contribution Period for EDLI Claim

To claim EDLI, what should be the minimum contribution period in PF?

Exit Date for Deceased Employee

What should be the exit date for an employee who passed away on duty on 24.02.2018?

EPF and EDLI Contributions

Also, can you please explain if his contribution on ECR is not seen for 24 days of February as the employer did not include his name in the contribution for February 2018? Can this EPF amount along with EDLI contribution be paid at a later date, as the claim is yet to be filed?

You may exit him on 25th February 2018. If you had not included him in the February ECR, the dependents will not get EDLI benefits because his death could not be considered as a death while in service.

Employee Death and Termination Issues

The fact is the employee passed away on duty in the office on 24th Feb 2018. However, the employer has not officially terminated him yet, and the Employee Contribution Report (ECR) for February was not raised or it was missed by the employer by mistake, as the payment was made to their family in cash for that month.

Is there any way to assist the employee's family?

EPFO Claim Considerations

EPFO has to consider the claim of their existing members only, i.e., they have to check the ECR filed by the employer for the continuity of service until the date of death. It might have non-contributory periods (NCP), but if the name is missing from ECR, then the department sets the claim aside, as it is deemed that the employee was not on the payroll in the specific month of the incident. Hence, not a member of EPF as per the ECR submitted by the employer.

Employer's Role in ECR Filing

If the employer is able to file the ECR and pay contributions for that employee for the specific month (a single-person ECR can be filed also, with some restrictions on the time frame), then it may be appealable and worth consideration by RO.

Compliance and Documentation

Unless the compliance is done from the employer's side, the postmortem report and FIT are just proof of death, not the EPFO membership.

Understanding Death on Service/Job

I believe death on service/job means death while on the company's roll (whether receiving a salary or on loss of pay days). Therefore, if an employee passes away while on the job (whether receiving pay or on leave without pay) on, for example, the 10th of any month, they should be considered employed until the 10th, even if all 10 days were loss of pay days. If you specify the 10th as the exit date, the PF authority should not reject the claim.

Additionally, no EDLI contribution is made if the employee does not earn any salary.

Regards,
Puran Dangwal