Takeover warning for firms resisting new EPF rate
Even as the companies are declining to pay the 9.5% interest rate on EPF, the employee provident fund organisation (EPFO), which scrutinises revenues of 239 organisations, is cautioning the corporates with a takeover clause under the EPF Act.delhi Updated: Mar 30, 2011 01:06 IST
Even as the companies are declining to pay the 9.5% interest rate on EPF, the employee provident fund organisation (EPFO), which scrutinises revenues of 239 organisations, is cautioning the corporates with a takeover clause under the EPF Act.
A day before the central board of trustees meet on Wednesday, the EPFO analysis shows that most of the trusts 'have a surplus and could pay the higher rate'.
According to the Employees Federation of India, 40 of the 42 it has submitted would suffer losses if they were made to pay higher EPF rates. But EPFO analysis of the same differs.
"Our review from field offices reveals most of the companies are in a position to pay. We were able to analyse 12 of the 42 companies EFI named and found at least five can pay the 9.5% interest on accounts," a senior EPFO official told HT.
While the employers side on the issue would be raised on Wednesday at the CBT meet, EPFO armed with numbers is preparing a counter attack.
"The companies have no option but to pay the rate decided by the CBT. Their undertaking clearly states .... the companies have to shell out the extra from their own resources," a senior official of the ministry of labour and employment said. "If they still do not want to pay, we are ready to take over the trusts in interest of the employees."
But the employer federations are adamant. "Their analysis is only partly and partial … the EPF is insisting on the higher rate to cover up the accounting blunders they did for 52 years," Sharad Patil, secretary general of EFI and a CBT member said.
The EFI is also using finance ministry's questioning of higher rate as ammunition to argue for exemption from the 1% hike.