10K contractors defaulting on employees’ PF deposits

Sushant Ranjan
Sunday, 10 June 2018

The BJP-led NDA government claims the government has created 55 lakh jobs since 2014 while one crore new Provident Fund (PF) accounts have been opened and PF contributions are being continuously deposited in employees’ accounts. However, the Employees’ Provident Fund Organisation (EPFO) of Pune region found that around 10,000 private contractors are not complying with the legal provisions by not depositing the amounts in employees’ accounts.

Pune: The BJP-led NDA government claims the government has created 55 lakh jobs since 2014 while one crore new Provident Fund (PF) accounts have been opened and PF contributions are being continuously deposited in employees’ accounts. However, the Employees’ Provident Fund Organisation (EPFO) of Pune region found that around 10,000 private contractors are not complying with the legal provisions by not depositing the amounts in employees’ accounts.

According to the EPFO, in Pune and Pimpri Chinchwad, around 10,000 private contractors are involved in sectors like building construction, road construction and others. An average 45 to 60 workers work under each contractor. It is mandatory for every contractor to deposit the PF contribution of the employee every month, which is not happening. As a result, when the EPFO officials verify employees’ accounts, they find most of the times that the employer’s contribution is not deposited on time. The officials have been issuing notices continuously.

The officials said when they send notices to these contractors, they reply that the principal employer (under the contract they are working) has not paid them. So, they are unable to deposit the amount.

Arun Kumar, PF Commissioner, Region 1 told Sakal Times, “As per the provision of the PPF Act, it is the responsibility of the principal employer to ensure timely payment of PF contribution of regular as well as contractual employees.”

“In case, the contractors fail to comply, the recovery is made from the principal employer, including the penalty and interest for delay in payment,” he said.

The officials said action will be taken for non-payment of dues and an inquiry will be initiated under section 7A of The Employees’ Provident Funds And Miscellaneous Provisions Act, 1952.

The officials said that if a company is found to be non-compliant with its PF deposit, it will not only have to pay the dues but also 12 per cent interest, with 17 per cent penalty on the same, depending on the number of days of delayed payment
EPFO is one of the World’s largest Social Security Organisations in terms of clientele and the volume of financial transactions undertaken. At present it maintains more than 15 crore accounts.

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