How Should We Handle a PF Deposit Error Affecting Former and Current Employees?

Learned professionals, I require your help regarding this issue, so I request your assistance. Please address any doubts you may have, and I will clarify them immediately. I hope you can assist me with this urgent matter.

Issue with PF Deposit Error

In 2017, the firm mistakenly deposited PF into an exited employee's account (who exited in 2012) instead of the correct employee's account.

Current Situation

Now, the exited employee has returned to the firm and stated that the PF department is not releasing his PF money because a deposit was made at a later point, but the date of exit is earlier. The firm has submitted a letter to the PF department requesting a refund of the wrongly submitted amount. The PF department responded that a refund is not possible and is asking for a written explanation about which employee's PF was wrongly given to the exited employee.

Settlement with the Correct Employee

The correct employee left the firm in 2020 and completed the Full and Final (FNF) settlement with the firm in front of the ACL. During this settlement, he agreed not to trouble the firm regarding any other dues later, including gratuity, PF dues, salary dues, etc., all of which were discussed and documented in the FNF document that he signed.

Request for Guidance

Now, what should the firm do? Please guide me in any way you can. Thank you.

From the details you have provided, it is understood that the organization has asked for a refund of the wrongly remitted amount. The PF has requested an explanation letter as to why it was paid to the wrong account. It is well within the rights of the PF to do so.

It is advisable to submit your grievance to the PF online. They have a robust grievance cell to address the issues of members and employers.

Visit the below-mentioned link: http://www.epfigms.gov.in/

You can register the complaint, track its status, and send reminders if it is not resolved within 30 days.

Hope this information helps.

Thank you, madam, for your response. Now, what should the firm do since the PF department has verbally instructed the firm to pay PF into the correct employee account, which the firm has already paid during his Full and Final settlement? The firm also has to pay late fees and arrears to the correct employee account. This situation is not resolving the exit employee problem and is also becoming a financial burden to the firm, all due to a clerical mistake that led to the amount being deposited into the wrong account.

Additionally, I personally have a doubt regarding why the PF office does not pay the exit employee their actual share of PF to resolve the matter. I hope I have effectively conveyed my concerns to you, madam.

Dear CiteHR member Mr. Vignesh,

Although Ms. Sudha has proposed raising a grievance for early settlement of the issue you posted, I suggest that the firm should not raise the grievance at this stage because it may be taken offensively by the concerned officer of the PF Department.

A bare perusal of the text posted by you indicates two things:

1. The firm wrongly deposited the PF amount in 2017 for an employee who had already exited in 2012.
2. The correct employee left the firm in 2020 and signed the FNF settlement document before the ACL.

I would like the following points to be clarified:

1. Are the employee who left in 2012 and the employee who left in 2020 the same person or different individuals?
2. Which of the two employees has raised the grievance?
3. When were your PF records last inspected and checked by the PF Inspector? Was any deficiency notice issued by the PF Department?
4. Up to which year have the firm's accounts been audited?
5. What is the status of the reconciliation of subscribers' accounts and the amount remitted to the PF Department? Is there any audit observation on it?
6. The PF Department cannot disallow the refund/adjustment of the amount remitted by mistake, but the firm must provide a reasonable explanation along with the audit report if asked for by the PF Department, as well as the reconciliation statement of paid challans with subscribers' accounts.
7. Grievances on the PG portal should only be raised by the employee, not by the firm.

Further opinion/advice will be given upon receipt of all the above clarifications. You may, if you wish, send your clarifications individually to me to maintain the firm's secrecy.

With regards,

Chandra Mani Lal Srivastava
Master Consultant
[Phone Number Removed For Privacy-Reasons]
[Email Removed For Privacy Reasons]

Dear Sir,

Both members are two separate employees. The 2012 exiting employee went to the PF department where his amount was denied because there was a contribution by the firm in his account after his exit. The firm had already given the PF department a letter to transfer the PF amount from the wrong account to the correct account in 2018 when they found their mistake, but the PF department did not respond to it. Later in 2020, the other employee left the firm and completed the Full and Final (FNF) settlement. As per my knowledge, the 2020 exiting member has withdrawn his entire PF amount. I believe that since the firm is small, there was no inspection by the department. An e-inspection was issued to the firm for the Covid period due to loss of work, for which I, as the mediator, was unable to file the return because of technical issues. The e-inspection has hence been closed without filing the return, which is another burden for the firm that I am trying to find a solution for.

Dear CiteHR member Mr. Vignesh,

From your response, it is observed that the factual position is not correctly available with you. So, I feel handicapped to offer appropriate comments.

Suggested Steps for Resolution

I shall suggest that the firm obtains a representation from the aggrieved employee and writes a letter to the concerned RPFC, attaching relevant documentary evidence to support the inadvertent remittance of PF in respect of the exited employee who happens to be the aggrieved employee. A copy of this letter should be endorsed to the aggrieved employee to further follow up on the matter with RPFC.

Escalation Process

In case the aggrieved employee does not receive a suitable response within 15 days, he may be advised to lodge a grievance on the Grievance Portal of EPFO. If the EPFO does not resolve the problem, the aggrieved employee may be advised to escalate his grievance to the Central Govt. grievance portal.

I hope that if the above steps are followed, the local PF office shall resolve the matter. If it is not resolved, then you can obtain advice for further course of action from me.

Regards,
Chandra Mani Lal Srivastava
Master Consultant
[Phone Number Removed For Privacy-Reasons]
Contract Management, Tender, Works & Service Laws Expert
[Email Removed For Privacy Reasons]
New Delhi/09.02.2022/10:26 pm