Dear All,
Given below is a new article published in today’s TOI.
Employees with EPF benefits, in case of a complaint, will now have to prove that their employers had deducted the statutory dues while giving them salaries. Moreover, investigations into allegations of default will now be conducted only if it pertains to the past seven years only.
The EPFO , which manages lifetime savings of 6.15 crore individuals, has just made life tougher for workers. Employees will now have to prove that their employers deducted the statutory dues while giving them salaries, a move that will further benefit construction companies and contractors in particular who often claim that they have paid salaries to thousands of workers without actually transferring it.
What is going to add to the woes is EPFO's decision to limit investigations into allegations of default only if it is for the past seven years. "It has been observed that open-ended assessment, inquiries and investigations serve no real purpose. Moreover, such inquiries often do not result in the identification of beneficiaries and only tend to harass the employers and establishments. It is accordingly directed that no inquiry or probe shall ordinarily go beyond seven years that is, it shall cover the period of default not exceeding preceding seven financial years. It is to be ensured that compliance actions are initiated in time and there is normally no reason for extending the scope of investigation and assessment inquiry beyond previous seven financial years," central PF commissioner R C Mishra said in a circular issued on November 30, the day he superannuated.
While trade unions are protesting against the move, the same six-page circular also has a clause on lump-sum assessments dealing with establishments that hire "workers of migratory nature" on short-term project-based employment, a reference largely to the construction and real estate sector.
TIMES VIEW
In a country which has precious little by way of a social safety net, the provident fund is one of the few such fallback options, even if only for those in the organized labour force. Any change in the rules governing this scheme must therefore be tested on the touchstone of whether it enhances the safety net or weakens it. Imposing a time limitation on when defaults can be investigated clearly weakens it. Most of those whose savings lie in the EPF do not regularly track whether money is being deposited in it by their employers and, if so, whether it is as much as it should be. They may well discover a default well after it happens. Clearly, they cannot be left with no scope for redress due to a time limitation clause.
This is for your information and discussion.
Thanks and regards.
Keshav Korgaonkar
From India, Mumbai
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2636Given below is a new article published in today’s TOI.
Employees with EPF benefits, in case of a complaint, will now have to prove that their employers had deducted the statutory dues while giving them salaries. Moreover, investigations into allegations of default will now be conducted only if it pertains to the past seven years only.
The EPFO , which manages lifetime savings of 6.15 crore individuals, has just made life tougher for workers. Employees will now have to prove that their employers deducted the statutory dues while giving them salaries, a move that will further benefit construction companies and contractors in particular who often claim that they have paid salaries to thousands of workers without actually transferring it.
What is going to add to the woes is EPFO's decision to limit investigations into allegations of default only if it is for the past seven years. "It has been observed that open-ended assessment, inquiries and investigations serve no real purpose. Moreover, such inquiries often do not result in the identification of beneficiaries and only tend to harass the employers and establishments. It is accordingly directed that no inquiry or probe shall ordinarily go beyond seven years that is, it shall cover the period of default not exceeding preceding seven financial years. It is to be ensured that compliance actions are initiated in time and there is normally no reason for extending the scope of investigation and assessment inquiry beyond previous seven financial years," central PF commissioner R C Mishra said in a circular issued on November 30, the day he superannuated.
While trade unions are protesting against the move, the same six-page circular also has a clause on lump-sum assessments dealing with establishments that hire "workers of migratory nature" on short-term project-based employment, a reference largely to the construction and real estate sector.
TIMES VIEW
In a country which has precious little by way of a social safety net, the provident fund is one of the few such fallback options, even if only for those in the organized labour force. Any change in the rules governing this scheme must therefore be tested on the touchstone of whether it enhances the safety net or weakens it. Imposing a time limitation on when defaults can be investigated clearly weakens it. Most of those whose savings lie in the EPF do not regularly track whether money is being deposited in it by their employers and, if so, whether it is as much as it should be. They may well discover a default well after it happens. Clearly, they cannot be left with no scope for redress due to a time limitation clause.
This is for your information and discussion.
Thanks and regards.
Keshav Korgaonkar
From India, Mumbai
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Thank you, Keshav Ji, for providing such prompt information to all of us. I personally believe that the decision is quite reasonable. Seven years is more than sufficient in this digital age.
Now, employees are expected to be more vigilant, monitor effectively, and take action within the specified time frame. This change will alleviate the burden on employers by reducing the need for unnecessary record-keeping over extended periods.
Pkjain
From India, Delhi
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Now, employees are expected to be more vigilant, monitor effectively, and take action within the specified time frame. This change will alleviate the burden on employers by reducing the need for unnecessary record-keeping over extended periods.
Pkjain
From India, Delhi
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Thanks, Keshav for this update! However, this move by EPFO is against the interests of employees as the burden of proof is now shifted onto them. Although RTI may provide some assistance, it could needlessly harass employees, especially when they relocate to other cities for a job switch.
Please comment!
From India, Delhi
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Please comment!
From India, Delhi
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The limitation does not make much difference, as 95 percent of present cases are below that period only. Regarding the identification of the beneficiaries, in the same circular, it was stated that the employer can be prosecuted for non-submission of information under section 14 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952; therefore, that was taken care of. However, definitely, in a span of 7 years, PF inspections will be conducted, which also can be taken into consideration. However, regarding construction workers, a more transparent policy is required to come.
Edify compliance planners
Hyderabad
From India, Hyderabad
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Edify compliance planners
Hyderabad
From India, Hyderabad
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