Current Issues

The Hon’ble Supreme Court has decided the Special Leave Petition (C) Nos. 8658 – 8659 of 2019 relating to EPS 95 on 04.11.2022 and the EPFO after getting directions from the Central Government has issued a Circular on 29.12.2022 wherein instructions have been issued by the EPFO to all its Zonal as well as Regional Offices to implement the directions contained in para 44 (ix) of the judgment dated 04.11.2022.

My views in this regard is as follows:-
1) Supreme Court has decided that

  1. Those employees who had retired prior to 01.09.2014 without exercising any option under Para 11(3) of pre amended scheme – would not be entitled to the benefits of this judgment.
  2. Those employees who had retired prior to 01.09.2014 & had exercised option under Para 11 (3) of pre amended scheme prior to amendment of 2014, shall be covered.

2) Supreme Court has upheld the judgment of Double Bench in respect of R.C. Gupta Case so far as interpretation of the proviso to Para 11(3) (pre amendment) Pension Scheme & authorities shall implement the directions as given therein (R.C. Gupta’s Case) with in a period of 8 weeks subject to directions of Supreme Court as in above paras.

3) As per R.C. Gupta’s Judgment dated 04.10.2016

  1. As per para 4 – employees had taken plea that amendment made in EPS in 1996 was not in their knowledge at the time of their retirement in the year 2005 or so but they have contributed on their actual salary rather than on wage ceiling of Rs. 5000/- or Rs. 6500/- per month & their request was turned down by the RPFC on the ground that there was a cut-off date for exercising option (from the date of amendment) or from the date the salary exceeded the ceiling amount of Rs. 5000/- or Rs. 6500/- per month.
  2. As per Para 8 – The said dates are not cut off dates to determine the eligibility of employer employee to indicate their option under the proviso to clause 11 (3) of Pension Scheme.
  3. As per Para 10 – If both the employer and the employee opt for deposit against the actual salary and not the ceiling amount, the exercise of the option under paragraph 26 of the provident fund scheme is inevitable. Exercise of the option under paragraph 26(6) is a necessary precursor to the exercise of the option to the Clause under 11(3). Exercise of such option, therefore, would not foreclose the exercise of a further option under Clause 11(3) of the pension scheme unless the circumstances warranting such foreclosure are clearly indicated.

It is expected that EPFO will shortly issue another circular pertaining to higher pension issue in respect of other pensioners not covered under above directions as well as option forms etc. in the near future.

For further enquires the website of EPFO may be browsed.

Current Issues as upto April 2022

(A) CIRCULARS / NOTIFICATIONS
1) Circular dated 06.04.2022 on calculation & deduction of taxable interest relating to contribution in a Provident Fund exceeding specified limit as per Ministry of Finance Notification G.S.R. 604 (E) dt. 21.08.2021 can be persued on EPFO website.
2) The EPFO vide circular dated 17.03.2022 has directed all its field staff for not taking any coercive action for recovery of dues during the limitation period of appeal keeping in view the order dated 22.02.2022 passed by Hon’ble Bombay High Court in the matter of Kulgaon Badlapur Nagar Parishad Vs. RPFC Thane.
3) The EPFO vide its circular dated 13.01.2022 has directed all its offices for payment of pension to pensioners of EPS 95 on the last working day of the month.
4) The EPFO vide its circular dated 06.12.2021 has directed all its offices about the enrollment of all contractual / daily wage employees under the Act.

(B) GENERAL
Most of the working in EPFO is completely online including Registration of establishment thereby no need to visit offices, no submission of physical documents. EPFO has launched various online facilities which may be browsed at the website of EPFO i.e. www.epfindia.gov.in :-
1) Grievances related to services of EPFO can be lodged at portal of EPFO at https://epfigms.gov.in
2) The Ministry of Labour has lodged a samadhan portal for workman / union representative who wants to raise an industrial dispute. One can register his grievance on this portal. The website of labour ministry is www.labour.gov.in.
3) In case of dispute between the worker and the employer, Complaint regarding Industrial dispute can be lodged at Samadhan portal of Ministry of Labour at www.samadhan.labour.gov.in
4) As per latest information contractors can declare the details of principal employer and employees provided to the Principal Employer. Likewise principal employers can view the compliance status against such employees.
5) The EPFO has started the E-nomination for the members of EPF having the benefits of speedy and online settlement of claims through paperless claim process beside no visit to the EPFO Office or attestation by the employer.
6) EPFO has started certain facilities for its members wherein employee can update their date of exit on their own, Death claims can be uploaded, claim for scheme certificate under EPS Scheme, online update of date of birth in EPFO record etc.
7) EPFO has launched Universal Account Number Commonly known as UAN for each member which is a 12 digit number given to each unorganized worker which remains unchanged for the workers lifetime.
8) The new Labour Code Act is yet to come in force.
9) Help Line numbers of EPFO Offices can be browsed at www.epfindia.gov.in.
10) Under EDLI Scheme 1976 no contribution is to be paid by employee
11) Maximum assured benefit in case of death while in service is Rs. 7 Lakhs to be paid to the nominee or legal heir of EPF member

Current Issues as upto October 2020

1) Government has merged 29 Central Laws into 4 codes. While the Wage Code 2019 is already in place, the other three namely the Code on Social Security 2020. The Industrial Relations Code 2020 & the Occupational Safety, Health & Working Conditions Code 2020 have also come into existence.
a) The Code on Social Security, 2020 (No. 36 of 2020 dt. 29.09.2020) The Code replacing:

  1. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  2. The Employees’ State Insurance Act, 1948
  3. The Employees’ Compensation Act, 1923
  4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
  5. The Maternity Benefit Act, 1961
  6. The Payment of Gratuity Act, 1972
  7. The Cine Workers Welfare Fund Act, 1981
  8. The Building and Other Construction Workers Welfare Cess Act, 1996
  9. The Unorganised Workers’ Social Security Act, 2008.

b) The Industrial Relations Code 2020 (No. 35 of 2020 dt. 29.09.2020) The Code replacing:

  1. The Trade Unions Act, 1926
  2. The Industrial Employment (Standing Orders) Act, 1946
  3. The Industrial Disputes Act, 1947

c) The Occupational Safety, Health and Working Conditions Code, 2020 (Act 37 of 2020 dt. 29.09.2020) The Code replacing:

  1. Factories Act, 1948
  2. Mines Act, 1952
  3. Dock Workers (Safety, Health and Welfare) Act, 1986
  4. Building & Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
  5. Plantations Labour Act, 1951
  6. Contract Labour (Regulation and Abolition) Act, 1970
  7. Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
  8. Working Journalist and other News Paper Employees (Conditions of Service and Miscellaneous Provision) Act, 1955
  9. Working Journalist (Fixation of rates of wages) Act, 1958
  10. Motor Transport Workers Act, 1961
  11. Sales Promotion Employees (Conditions of Service) Act, 1976
  12. Beedi and Cigar Workers (Conditions of Employment) Act, 1966
  13. Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981

The amalgamation of these laws will remove the multiplicity of definitions & authorises without compromising the basic concepts of welfare & benefits to the workers besides widening the scope of benefits to bring equity amongst fixed term employees beside increasing the ambit of social security (For further complete details, please browse these codes).

2) The EPFO vide its circular dt. 17.02.2020 has issued directions to all its offices to conduct inquiries through e-court software i.e. entire work of assessment under Section 7 – A , 7 – B, 7 – C, 7 – Q, 14 – B & Para 26-B of dues & damages is to be done now through e-court system.

3) Ministry of Labour & Employment (M.O.L.) vide Notification dated 27th march 2020 (GSR 225E) has amended Para 68L according to which keeping in view outbreak of any epidemic or pandemic, a non-refundable advance from P.F. account of a member can be permitted not exceeding the Basic Wages & D.A. of that member for three months or upto Seventy Five percent of the amount standing to his credit in the Fund, whichever is less.

4) M.O.L. vide another notification dt. 18.05.2020 by an
a) Amendment in Section 6, has given relief to certain establishments in respect of wages (Reduction of rate of contributions) payable for the months of May, June & July, 2020, details of which can be seen in the Notification No. S.O. 1513 E
b) EPFO vide O.M. dt. 14.07.2020 has intimated the extension of validity period of scheme for implementation of PMGKY package for credit of contributions (24% of wages) by Government of India for the month’s upto August, 2020.

5) EPFO vide its circular dt. 15.05.2020 has directed all its officers that keeping in view of Pandemic situation, for any delay in payment of any contribution or administrative charges due for any period during the lockdown, no proceedings should be initiated for levy of penal damages in such cases.

6) Persons registering their grievances on whats App helpline may get reply advising them to register their grievances on EPFIGMS for speedy redressal using the link https://epfigms.gov.in or through UMANG App.

7) By a Gazette Notification No. GSR 132 E dt. 20.02.2020, normal pension has been restored after 15 years from the date of commutation as per para 12 B inserted after paragraph 12 of EPS 1995 which reads as follows:-
“12 B. Restoration to normal pension in cases of grant of commutation – The normal pension in respect of those members who availed the benefit of commutation of pension under the erstwhile paragraph 12 A of this Scheme, on or before the 25th day of September 2008, shall be restored after completion of fifteen years from the date of such commutation.”

8) EPFO vide letter dated 03.04.2020 has directed its offices to accept any of the certain documents listed as valid proof of date of birth, in cases where there is dispute in the date of Birth, beside authorising the APFC for allowing change of date of birth.

9) EPFO vide its letter dt. 17.07.2020 has directed its offices to settle the death claims on priority basis in the events of Industrial Accidents. Otherwise also in its earlier circular, directions were issued to settle all death claims within seven days.

10) EPFO vide letter dt. 14.09.2020 has issued guidelines to all officers relating to attachment of Bank Accounts for enforcing appearances U/s 7 – A of the Act, clarifying that in the wake of legal provisions under CPC, relating to this issue, power to make attachments of unlimited value or to freeze operation of Bank Accounts, is not relatable to any provisions of the Act, or Code of Civil Procedure & such actions are evidently illegal & amount to blatant misuse of authority beside causing harassment to the employer concerned.

FLASH NEWS:
The Ministry of Labour & Employment vide Notification No. GSR 713 (E) dt. 13.11.2020 has notified draft rules which the Central Government purposes to make in Code on Social Security 2020 (36 of 2020) & has invited objections from any persons within 45 days for consideration by the Central Government.

Latest Updates upto March 2019
  1. EPFO vide circular dated 22-03-2019, has directed all its offices to provide Calculation Worksheet of PF withdrawal at the time of final settlement of P F claims filed by the members either through the Registered mobile number or E- mail id as shall be provided by the member in the claim form.
  2. EPFO vide circular dated 6 th February 2019,( issued on 7 th Feb) has withdrawn its earlier circular dated 22-01-2019 relating to allowing members of EPS 95 ,the benefits of Pension on actual salary.
  3. Vide circular dated 15th February 2019, the EPFO has decided the role and functions of its District Offices, major being in the matters of Coverage and Compliance, Assessment of dues and Damages , Recovery of Asssed amount, Receipt of claims, Facilitating EPS Pensioners etc.
  4. MINISTRY OF LABOUR has launched the Single Window System for filing of Annual Returns under eight Labour Law Acts.
  5. There is likekyhood of start of automated transfer of EPF on changing of jobs.

For full and authentic news, pl. browse website of EPFO

FLASH NEWS

        Honourable Supreme Court in its judgement dated 28/2/2019 has finally decided the much awaited issue of deduction of special allowances paid by an establishment to its employees ,if, would fall within the expression “ Basic Wages”. While dismissing various petitions such as filed by Surya Roshni vide CA No. 3965-3966 of 2013, by Montage Enterprises vide CA No. 3967-3968 of 2013, by U-Flex Ltd vide CA No. 3969-3970 of 2013,etc, The Supreme Court has observed that no material was placed on record to show that allowances were either variable or were linked to any incentive for production resulting in greater output and that the allowances were not paid to all employees in a particular category, or were paid especially to those who availed the opportunity, it has to be shown that workman concerned had become eligible to get this extra amount beyond the normal work which was otherwise required to put in . No norms of work were prescribed, not possible to ascertain wether extra amount paid was for extra work than normal output required
    For full text and other details, pl . browse the judgement available at website of Supreme Court or other Legal websites.

EPF/ EPS

  1. Online facility is available for those members who have updated their e-KYC details duly approved by their employees.
  2. The withdrawal claims above Rs. Ten Lakh mandatory to be filed online only
  3. The assurance Benefit under EDLI Scheme has been enhanced to Rs. 2.5 Lakh
  4. Member can get higher Pension if depositing additional amount
  5. More than Forty Thousand Crores of rupee are lying in inoperative accounts as on 31.03.2016, as maintained by Employees Provident Fund Organization (EPFO).
  6. EPFO has launched many online services & is in the process of paperless function in the near future including e – court cases (Target fixed as 15th August 2018).
  7. Matter relating to deduction of P.F. contributions on various allowances is still pending with the Hon’ble Supreme Court & is in final stages.

ESI

  1. Director / M.D. of a Company, if drawing salary, are coverable under the ESI Act.
  2. Date of Birth as given in ESI identity card is not a conclusive proof.
  3. ESI Act being a Welfare Act should be interpreted in favour of employees. All daily wagers, casual workers are coverable.
  4. Member can get higher Pension if depositing additional amount
  5. Salary ceiling for coverage of an employee is Rs. 21000 P.M.
  6. There is no provision for voluntary coverage under ESI Act.

PAYMENT OF GRATUITY ACT, 1972

    1. The Central Government vide notification dated 29.03.2018 has increased the amount of gratuity payable to an employer under the said Act which shall not exceed twenty lakh rupees.
    2. There is no restriction upon wage ceiling or salary for entitlement relating to Gratuity which is payable even to contractual / piece rated employees & can be claimed in case Employer fails to pay the same.
    3. Gratuity cannot be attached in execution of any decree.
    4. Gratuity can be forfeited only on termination for prescribed misconducts.
    5. Formula for calculation of Gratuity:-

Salary X years of service X 15 / 26

PROSECUTION
Director is liable for prosecution if he fails to prove that he was not incharge of day to day affairs of the company.

OTHER LABOUR LAWS

  1. Principal Employer to pay wages if contractor defaults.
  2. Principal Employer under contract Labour (R & A) Act to ensure that minimum wages are paid to the workers of the contractor & wages must be paid in presence of Principal Employer.
  3. Staging of demonstration by workers in the premises of establishment can be restrained by the court.
  4. Daily wager has no right to hold the post for continuation of his job.
  5. Challenging of preliminary order of Labour Court in the higher court is not permissible.
  6. Supreme Court to interfere rarely in the matter of an award of Industrial Tribunal.

CURRENT ISSUES

  1. The Govt. has abolished the EPF APPELLATE TRIBUNAL at Delhi and Bengaluru vide notification dated 26-05-2017 , and in future all cases to be heard by CENTRAL GOVERNMENT INDUSTRIAL cum LABOUR COURTS ( CGIT ) situated at 22 places in India.
  2. CGIT Chandigarh has the jurisdiction on cases form UT,CHD, PUNJAB, HIMACHAL PRADESH, J&K, HARYANA (Partly ) While CGIT DELHI will also have jurisdiction over Haryana ( Partly ) beside Delhi and UP ( Partly).
  3. CGIT at Kolkatta and Mumbai shall also function as National Tribunals.
  4. CGIT Chandigarh has two courts , in Sector 18, hearing cases of odd and even numbers.

For details,please browse the website of CGIT.

1.EMPLOYEES ENROLLMENT CAMPAIGN – 2017
(IN FORCE W.E.F. JANUARY 2017 TO MARCH 2017)
Vide notification dated 30th December 2016, the Government of India has further amended following paras in EPF / EDLI Schemes under EPF & MP Act 1952:-

  1. In Para 82 –
    After paragraph 82, new para 82 – A has been inserted which will remain into force w.e.f. January 1st 2017 to 31st March 2017 wherein an employer who has not made certain employees as members of EPF for any reason, who were otherwise eligible for such membership, between 14 April 2009 to 31st December 2016, may declare such employees & thereafter within 15 days of declaration remit the employers payable contributions along with employees contribution if deducted from employees’ wages along with payable interest & damages.
    Thereafter, to file returns as per provisions.
    However, such declaration shall be valid only in r/o employees who are live as on 1st January 2017 but were not enrolled as members for any reasons& no enquiry U.s 7 – A or para 26 B of EPF Scheme or under Para 8 of EPS 1995 have been initiated.
  2. In para 30, (I) new proviso relating to waiver of members contribution for the period 1st January 2017 to 31st March 2017 is waived if not deducted from the members wages.
  3. In Para 32 – A, new table effective for the period but, 1st January 2017 to 31st March 2017 wherein valid declaration have been made, the rate of damages will be one rupee per annum.
  4. For Para 39, (I) new paragraph substituted where in Administrative charges for the Employees Enrollment Campaign2017 period shall be “nil”
    For full text of notification, further details & clarifications & format of enrollment form etc. kindly browse the website of EPFO.

2.ON PENSION UNDER EPS 1995

  1. BENEFIT OF TWO YEARS:-
    The Government of India has accepted the proposal of EPFO for grant of benefit of two years weightage to the members under EPS 1995, with membership of 20 years or more under EPS 1995 combined with membership period under erstwhile Employees Family Pension Scheme 1971. This also applies to cases settled.
    (For correctness & further details, please browse the website of EPFO).
  2. BENEFIT OF 4% INCREASE IN PENSION
    The Govt. of India has extended benefit of grant of 4% increase in Pension of each year after the age of 58 years upto 60 years on deferring drawal of Pension later than 58 years of age.
    (For further details, please browse the website of EPFO).
  3. PENSION ON HIGHER SALARY EXCEEDING 15000 PER MONTH
    The EPFO has advised its all RO / SRO’s to examine the scheme provisions & para 11 of EPS 1995, both in r/o additional contribution of 1.16% & also regarding submission of fresh options for contribution on salary exceeding Rs. 15000 per month as per provisions of Para 11 (4) of EPS 95.
    (For further detail / query, please contact the concerned office of EPFO or browse website of EPFO).

3. RESTRUCTURING OF ZONES &FIELD OFFICES IN EPFO

As per latest information available, the EPFO after having the approval of the Ministry of Labour & Employment, Government of India vide letter dated 27th December 2016, has restructured its Zones & Regional Offices. Now there will be 21 Zonal offices headed by Additional RPFC’s, 100 Regional Office headed by RPFC – I & 35 Regional offices headed by RPFC – II.
While Delhi & Uttarakhand Zonal office (at Delhi) headed by ACC will have R O’s headed by RPFC – I at Delhi (East), Delhi (West), Delhi (Central), Delhi (North), Delhi (South), Uttarakhand will have RO’s headed by RPFC – I at Dehradun &Haldwani.Haryana Zonal Office headed by ACC at Faridabad will have RO’s headed by RPFC – I at Faridabad, Gurgaon – I, Gurgaon – II, Karnal &Rohtak. Punjab & Himachal Office (at Chandigarh) headed by ACC will have RO’s headed by RPFC – I at Bhatinda, Chandigarh, Jalandhar & Ludhiana & at Shimla while R.O. Amritsar shall be headed by RPFC – II.

LATEST NEWS

1. ESI
As per amendment in ESI Rules, an insured women shall be entitled to 26 weeks Maternity Leave w.e.f. January, 2017. However, an insured woman having two or more than two surviving children shall be entitled to receive maternity benefits during a period of twelve weeks of which not more than 6 weeks shall precede the expected date of confinement.
2. EPF
In view of problems being faced by the employer, the EPFO as a special case has decided to give concession of grace period of 5 days to deposit the contributions & other dues for the month of December 2016 by 20th January 2017.

  1. Rate of PF contribution to remain @12 %. The proposal to reduce it upto 10% has been turned down by CBT of EPFO.
  2. Adm. Charges on EPF Scheme has been reduced to 0.65 percent from 0.85 percent wef 1-4-2017
  3. EPFO has introduced facilities for Online Payment, NEFT, Online Transfer Claim ( OTCP )
  4. Ministry of Labour has reduced the maintainance of Registers / Forms from 56 number to Five numbers under nine Central Labour Laws and Rules.

CURRENT NEWS RELATING TO EPF (AS ON 31.05.2016)
EPFO is going to offer all kinds of services online to employees through UAN (Universal Account Number duly linked with Aadhaar Card

  1. Member of EPF can check online:-
    a) If his establishment is covered.
    b) If establishment has deposited P.F. dues.
    c) If his name appears in the list of employees for whom P.F. dues have been paid by his employer.
  2. Employees who have activated their UAN can avail following services:-
    a) Through SMS to know their P.F. Balance & contribution details at EPFO HO UAN ENG to 07738299899
    b) To know the balance by giving a missed call at 01122901406
    c) Smartphone users can download EPFO mobile application (M-Sewa) to check their P.F. balances & other details like passbook.
    d) EPFO launches simple forms for settling claims based on UAN – employers attestation is now no longer necessary for filing P.F. claims provided the UAN number is activated & linked with Aadhaar number, bank details are there in UAN & KYC has been verified by the employer using digital signatures.
  3. Employees whose Aadhaar or Permanent Account Number (PAN) have been seeded in their UAN & activated by their employers may submit claim forms directly to EPFO without attestation of their employers.
  4. Member of EPF can receive monthly updates of credits in his account of his mobile number provided his UAN is linked with Aadhar& mobile number is linked with UAN.
  5. EPFO has launched one employee – one EPF account drive to get the money transferred if having many accounts. One can get his money transferred online through the Online Transfer Claim Portal (OTCP).
  6. Employer to obtain Form – 11 & to feed the previous employment details of newly joined employees.
  7. Rate of interest for the 2016 to be credited in the account of each member @ 8.80%.
  8. Benefit under EDLI scheme increased upto six lac as maximum insurance in death cases.
  9. Section 192A of Income Tax Act 1961 has been amended to raise the threshold limit of P.F. withdrawal from 30, 000/- to 50, 000/- for TDS w.e.f. 01.06.2016.
  10. To credit interest to inoperative accounts.
  11. About Rs. 43, 000/- Crore is lying in inoperative EPF accounts.
  12. RTI application can be filed for EPF issues.
  13. Services provided by EPFO falls under the jurisdiction of Consumer Protection Act 1980as amended upto date i.e. complaint can be filed before the Competent Consumer Court.
  14. Grace period of 5 days to deposit contributions has been withdrawn w.e.f. February 2016.

RECENT NEWS RELATED TO EPF APPELLATE TRIBUNAL
(AS ON 31.05.2016)

  1. EPF Appellate Tribunal at Bengaluru has started functioning. Temporary address of New Southern Tribunal is as under:-
    EPF Appellate Tribunal, Bengaluru Bench – 62, Industrial Suburb, Yeshwanthpur, 2nd Stage, Bengaluru – 560022.
  2. The fee for filing appeal before EPFAT has been increased from Rs. 500/- to Rs. 2, 000/-.

LATEST DECISIONS BY EPFAT AND VARIOUS HIGH COURTS BETWEEN JANUARY 2016 TO MAY 2016.

    1. Determination of EPF dues without identifying employees is liable to be quashed.
    2. Rate of damages to be levied before 26.09.2008 were inclusive of interest.
    3. Principal Employer cannot be held liable in respect of contractors having independent Code Number.
    4. Damages can be waived but not the interest.
    5. If delay is not intentional, levy of damages & interest at higher rate is not justified.
    6. There is no limitation period for initiating proceedings for levy of damages & interest.
    7. Loaders / unloaders to be counted for coverage purposes if working on regular basis.
    8. No contributions to be paid by Employer if not deducted from wages of employees for pre-discovery period.
    9. Order passed U/s 7 – A on the basis of Enforcement Officers report only is to be set aside.
    10. EPF authorities not empowered to direct Employer to pay P.F. contributions on the basis of minimum wages.
    11. Minimum wages can be split into allowances for the purpose of P.F. contributions.
    12. Determination of P.F. dues on the basis of Balance Sheet are liable to be quashed.
    13. Minimum wages can be split into allowances for P.F. contributions. P.F. authorities have no power to direct employer to pay P.F. contributions on minimum wages.
    14. Assessment of dues on the basis of Balance Sheet is liable to be quashed.
    15. Levying damages & interest without identification of beneficiaries is illegal.
    16. EPF contributions pertaining to construction workers engaged through contractors are payable.
    17. Principal Employer has to ensure minimum wages to workers of contractor.
    18. P.F. to be deducted if lump sum amount is paid towards basic wages.
    19. P.F. to be deducted in respect of employees engaged through contractor.
    20. Recently as per amendment in Section 192A of the Income tax – No TDS will be deducted for withdrawals upto the amount of Rs. 50, 000/- w.e.f. 01.06.2016. Earlier this limit was upto Rs. 30, 000/-

NOTE:-
As per the directions of the Ministry of Labour there will be no inspection of establishments falling in the MSME if setup within three years but will have to file online self-certified returns or self-declaration form as prescribed under ShramSuvidha Portal. However, there will be random risk based inspection system.

LATEST IMPORTANT DEVELOPMENTS IN THE MATTER OF EPF & ESI AS UPTO OCTOBER 2016LATEST IMPORTANT JUDGMENTS BY SUPREME COURT / HIGH COURT IN RESPECT OF EPF

    1. Non production of records by the employer may attract adverse inference.
    2. A member of EPF is entitled to the pensioner benefits only on attaining the age of 50 years & having fulfilled the required formalities. Delay by the department is completion of papers is no ground to deny the benefits.
    3. Employee is not entitled to higher pension than his entitlement.
    4. P.F. cannot be forfeited even on dismissal for moral turpitude.
    5. Though the liability is joint & several but EPF authority is not entitled to recover the damages amount separately from the transferor & transferee.
    6. Attachment of accounts before expiry of limitation period for filing appeal, is not sustainable.
    7. A director having no control over the day to day affairs of the company, cannot be prosecuted for default in payment of EPF dues.
    8. Employer must be given opportunity of hearing before his arrest.
    9. In the matter of Builders Association of India Vs. UOI, the Hon’ble Supreme Court has made clear that during the process of enquiry, the steps will also be taken to identify the workman either of the petitioner or engaged through contractors. It has also been observed that organization will ensure that the contribution taken form the petitioner will actually go to the benefit of the employee concerned.

(It is reported that about 43, 000 crores of rupee are lying inoperative in EPF accounts).

  1. Impugned order is not sustainable if the opportunity to cross examine the Enforcement Officer is not allowed being violation of principles of natural justice.
  2. EPF Appellate Tribunal can reduce damages after taking into consideration the mitigation circumstances like illegal strike, closing down of establishment, BIFR recommendations etc.
  3. Levy of damages not to exceed the amount of arrears.
  4. A plea cannot be taken in writ if not taken before EPFAT.
  5. Fixing of liability for the period prior to coverage date is not sustainable.
  6. One cannot be a judge for his own cause
  7. For coverage purposes –The partners cannot be treated as employees.
  8. EPF authority is vested with the powers of a civil court.
  9. Employer is not liable for contributions over & above the prescribed wage ceiling
  10. It is not provided in the Act or Scheme that authorized signatory would be liable to penalty for default.
  11. An appeal lies before EPFAT under Section 1(3) & (4), U/s 7 – A, 7 – B, 7 – C, & 14 – B of the EPF Act.
  12. Appeal against demand notice only is not tenable.
  13. Review U/s 7 – B to be done by the same officer & not by the higher officer.

LATEST IMPORTANT DECISION OF EPFAT

    1. Principal Employer cannot be fastened with the liability of contractors having independent code number.
      (However, principal employer always remain responsible for ensuring the compliance in respect of its contractor employees)
    2. Determining dues on the basis of percentage of amount paid to contractors is not sustainable.
    3. Non compliance of orders of EPFAT amounts to contempt of court.
    4. Authorities to recover dues by adhering to the statutory provisions.

Statement of employee to be recorded by the EPF authority when employer – employee relationship is denied by the employer.

  1. EPF authority cannot compel for contributions on bifurcated minimum wages – Employer is liable to deposit contributions on basic wages & not on all the allowances.
    (Matter is still pending before Supreme Court on this issue).
  2. Imposing damages & interest on higher rates not justified if delay was not intentional or wilful.
  3. Before 26.09.2008, the element of interest was included in Damages – only after that interest is segregated.
  4. There is no prescribed limitation for service of notice in cases of levying of damages & interest on delayed remittances.
  5. An order passed without following fair & transparent prescribed procedure i.e. without following the principles of natural justice is liable to be set aside.

LATEST NEWS IN RESPECT OF EPF

    1. The Gazette notification dated 10.02.2016 for amendment in Paragraph 68, 68 (O)& 69 & insertion of new Para 68 – N NNN in EPF Scheme 1952, has been withdrawn by the MOL vide letter dated 19.04.2016.
    2. Dispute relating to coverage of an employee under the Act can be decided by the RPFC under Para 26 – B of the Act.
    3. EPFAT Bench at Bengaluru has started functioning at No. 62, Industrial Suburb, Yeshwanthpur, 2nd Stage, Bengaluru – 560022.
    4. Vide G.S.R. 440(E), as per amendment in E.P.S. 1995, a member who has attained the age of fifty eight years & is otherwise eligible for pension under clause (a) of Sub Paragraph (I) of this paragraph, if he so desires, may be allowed to defer the age of drawing pension later than fifty eight years but not beyond sixty years of age.

(For details – please refer to full notification).

  1. No tax is to be deducted at source for P.F. withdrawals upto Rs. 50, 000/- from June 2016 as per amendment in Section 192 – A of Income Tax Act, 1961.
  2. Interest rate for EPF members account for the year 2015 – 16 declared @ 8.80% as per EPF’s letter dated 25.05.2016.
  3. On the basis of UAN based Form 10 – D, pension can be fixed without signature of employers if Aadhar number & bank details have been seeded in UAN & have been duly verified by the employer using digital signature & the details of employees are available in Form 11 (New).
  4. Many amendments have been made in respect of EPF matters in the recent past relating to wage ceiling, pension, EDLI etc. Please refer to these amendments in the official gazette.
Latest News Relating to EPF

Current issues

  1. The EPFO is going to provide the facility for online PF transfer, withdrawals from Jul 1.
  2. The EPFO is considering the clubbing of allowances with basic pay for P.F. deductions.
  3. The EPFO is proposing to raise the minimum pension of Rs.1,000/- P.M.
  4. The P.F. number will remain be same after switching over the job as per plan under consideration by the government. The EPFO is going to have the central data that would house information related to all accounts currently held at different regional offices.
  5. The raise in EPF ceiling is under consideration.
  6. EPFO has asked its field staff to update about 94 lacs P.F. accounts.
  7. EPFO has started the following facilities online
    1. EPF balance online
    2. Downloading account statement
    3. Tracking of claims.

    MOST IMPORTANT

    Please take care that in case of higher contribution over & above the wage ceiling, if no permission has been obtained from RPFC on joint request, employee will not get higher pension on the basis of higher contributions made but instead RPFC will transfer the excess amount received through high contribution, into the EPF account of the employee.