Dear Sirs.
As per sub-section (kk) of Section 2 of the Employees Provident Funds Scheme, 1952, sugar industries are fall under seasonal factory. Being a seasonal establishment, the crushing season is usually run intermediately. Accordingly, seasonal employees are used to give seasonal break during off-season. However, they are eligible for Retention Allowance up-to 50% category-wise for off-season period to retain their services.
This allowance is paid, if they report for duties during the next season, subject to completion about 40 days from joining the duties during the next season. Under the circumstances, it is not feasible for employer to consider PF contribution on Ret. Allowance during off-season. The employer is used to generate common separate ECR & Chalan of Ret. allowance and remit to EPF, after completion of 40 days in next season. While generating online ECR the PF contribution considered on cap of Rs.15,000/-, there is no other way to consider monthly contribution on Ret. allowance of off-season period.
The EPF authority has issued Notice under Sec 7 A & 14 B for interest and damages on delayed payment of Ret. Allowance. As per their contentions, the Ret. Allowance is salary & it is obligatory on part of employer to consider PF contribution on Ret. Allowance in each month of off-season.
Now the question is, if we consider PF contribution for each month only sake of PF contributions, later if the employee is failed to join duties in next season, he will not be eligible for Ret. Allowance, but he may claim, as we have paid PF contributions on the same.
Case laws on Retention Allowance is attached for more clarifications.
Kindly guide us in- light of provisions of applicable law to defend the case.
Manager HR
From India, Nashik
5As per sub-section (kk) of Section 2 of the Employees Provident Funds Scheme, 1952, sugar industries are fall under seasonal factory. Being a seasonal establishment, the crushing season is usually run intermediately. Accordingly, seasonal employees are used to give seasonal break during off-season. However, they are eligible for Retention Allowance up-to 50% category-wise for off-season period to retain their services.
This allowance is paid, if they report for duties during the next season, subject to completion about 40 days from joining the duties during the next season. Under the circumstances, it is not feasible for employer to consider PF contribution on Ret. Allowance during off-season. The employer is used to generate common separate ECR & Chalan of Ret. allowance and remit to EPF, after completion of 40 days in next season. While generating online ECR the PF contribution considered on cap of Rs.15,000/-, there is no other way to consider monthly contribution on Ret. allowance of off-season period.
The EPF authority has issued Notice under Sec 7 A & 14 B for interest and damages on delayed payment of Ret. Allowance. As per their contentions, the Ret. Allowance is salary & it is obligatory on part of employer to consider PF contribution on Ret. Allowance in each month of off-season.
Now the question is, if we consider PF contribution for each month only sake of PF contributions, later if the employee is failed to join duties in next season, he will not be eligible for Ret. Allowance, but he may claim, as we have paid PF contributions on the same.
Case laws on Retention Allowance is attached for more clarifications.
Kindly guide us in- light of provisions of applicable law to defend the case.
Manager HR
From India, Nashik
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
EPF - Pension contribution is zero WHY.jpg
Analysis on SC's judgment on EPF Contribution on Spl.Allow.docx
EPF-Circular-da ted-23-May-2011 -Splitting-of-M inimum-Wages-fo r-the-Purpose-o f-PF-Contributi on-Not.pdf