The Employee Provident Fund (EPF) scheme is for the good of people and hence the government has made efforts to keep it mandatory. In what may further ensure full participation from both workers and employers, companies which had not earlier enrolled their employees under the EPF scheme can now do so, against payment of a minimal damage fee of Re 1 per year of default.
Moreover, if an employee wasn't enrolled earlier and his/her share of contribution was not deducted from salary, the employer company had to pay this sum also in addition to the past defaults of its own contribution. However, now under the amnesty scheme, only the employer's contribution has to be deposited.
The objective of the amnesty is to ensure enrolment of employees and spread the benefit of the EPF scheme. Companies having 20 or more employees are required to mandatorily enrol those employees under the EPF scheme who have a salary of up to Rs 15,000 per month. Additionally, the EPF scheme is optional for those drawing a higher salary. However, once an employee opts for the scheme, he or she cannot opt out.
As per the scheme, both the employer and employee are required to contribute 12 percent per month towards EPF against the employee's basic salary plus dearness allowance. However, under the amnesty, interest at the rate of 12 percent on the amount due for delayed deposit of the contribution will be payable for the period of delay.
This scheme, which has come into force from January 1, is open until March-end. The main purpose of the amnesty is to expand coverage of the EPF scheme. A huge amount of EPF dues is to be paid as arrears. More than a lakh employers had not deposited PF contributions and the arrears outstanding as of March 31, 2015 was nearly Rs 3,000 crore.
After depositing the sums, a detailed return has to be filed with the Regional Provident Fund Commissioner. Employers are eligible to participate in the amnesty only if proceedings under section 7A (inquiries) have not already commenced against them.
However, it is not clear whether the amnesty scheme will cover cases where employees had been enrolled in the EPF scheme but where there was a shortfall in depositing contributions.