Addressing Compliance Failures in Partnership Firms
How should related compliances be addressed if a partnership firm has failed to fulfill labor laws regarding Gratuity, PF, ESI, etc., and employees have been working for 22 years or more? How will the liability of the firm be calculated in such a case?
From India, Pune
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How should related compliances be addressed if a partnership firm has failed to fulfill labor laws regarding Gratuity, PF, ESI, etc., and employees have been working for 22 years or more? How will the liability of the firm be calculated in such a case?
From India, Pune
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Liability Calculation for Employee Welfare Schemes
The liability has to be calculated for each employee welfare scheme like PF, ESI, Gratuity, Labour Welfare Fund, Maternity Benefit, etc. In addition, there will be penalties and interest applicable for the past years. Non-compliance for 22 years means there could be prosecution as well.
From India, Mumbai
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1593The liability has to be calculated for each employee welfare scheme like PF, ESI, Gratuity, Labour Welfare Fund, Maternity Benefit, etc. In addition, there will be penalties and interest applicable for the past years. Non-compliance for 22 years means there could be prosecution as well.
From India, Mumbai
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Coverage Under Various Acts
The provisions for coverage of the establishment under the Payment of Gratuity Act 1972, the Employees' Provident Fund and Miscellaneous Provisions Act 1952, and the Employees' State Insurance Act 1948 are different.
Please let me know the number of employees in your establishment and the nature of the industry?
Regards, S K Mittal
[Phone Number Removed For Privacy-Reasons]
From India, Faridabad
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The provisions for coverage of the establishment under the Payment of Gratuity Act 1972, the Employees' Provident Fund and Miscellaneous Provisions Act 1952, and the Employees' State Insurance Act 1948 are different.
Please let me know the number of employees in your establishment and the nature of the industry?
Regards, S K Mittal
[Phone Number Removed For Privacy-Reasons]
From India, Faridabad
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Fortunately for you, most labor laws have a three-year limitation period for prosecution or civil action (though courts have the right to condone the delay, they are not likely to condone a delay of 22 years).
Compliance and Penalties
You need to start complying from the current period and then deal with the fallout when the authorities start asking questions. You need, however, to be ready for the penalty, interest, and back-payments.
Gratuity
If the employee has not claimed, you don't need to worry. But if they have claimed, you need to arrange for the money and pay it. And you need to take a Gratuity policy without further delay.
PF and ESIC Registration
For PF and ESIC, you need to register immediately. You may choose to fill the form in a manner as to minimize the impact, but here on the forum, we do not encourage falsification of records. Remember that you will have to answer queries from the department.
ESIC and PF Dues
ESIC may require you to pay the ESIC dues for three years if they discover that it was due. PF, I cannot commit as I don't know how they look at such violations.
Partnership Firm Liability
One big problem for you is that you are a partnership firm, so the partners are individually liable to pay the amount even if the firm does not have money.
From India, Mumbai
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Compliance and Penalties
You need to start complying from the current period and then deal with the fallout when the authorities start asking questions. You need, however, to be ready for the penalty, interest, and back-payments.
Gratuity
If the employee has not claimed, you don't need to worry. But if they have claimed, you need to arrange for the money and pay it. And you need to take a Gratuity policy without further delay.
PF and ESIC Registration
For PF and ESIC, you need to register immediately. You may choose to fill the form in a manner as to minimize the impact, but here on the forum, we do not encourage falsification of records. Remember that you will have to answer queries from the department.
ESIC and PF Dues
ESIC may require you to pay the ESIC dues for three years if they discover that it was due. PF, I cannot commit as I don't know how they look at such violations.
Partnership Firm Liability
One big problem for you is that you are a partnership firm, so the partners are individually liable to pay the amount even if the firm does not have money.
From India, Mumbai
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