Firms come under EPFO lens over provident fund payments

  • Arjun Sharma, Hindustan Times, Ludhiana
  • Updated: Nov 05, 2014 13:32 IST

Several companies in the city which have been allegedly evading provident fund to its workers have come under the scanner of the Employees’ Provident Fund Organization (EPFO).

All employers are required by statute to deduct their contribution to provident fund from employees’ salaries and deposit the funds with the EPFO.

After a notification on EPF guidelines for companies issued by the central government, the EPFO office in Ludhiana has begun scrutinizing EPF returns filed by local companies for the month of September.

According to the notification, the government hiked the wage ceiling from Rs 6,500 to Rs 15,000 for employees to be eligible for the employees provident fund scheme. An employer has to contribute 12% of a worker’s salary towards provident fund while an equal amount is deducted from the salary.

Sources in the EPFO said while the number of employees eligible for EPF payments in companies based in Ludhiana has more than doubled after the government’s notification, there are still companies where the number has remained the same.

On Tuesday officials at the EPFO office in the city conducted a manual inspection of documents relating to EPF returns filed by various companies.

EPFO executive committee member Badish Jindal, who was present during the exercise, said one of the objectives was to determine the variation in the number of employees eligible for provident fund payments before and after the government notification.

“The EPFO will go by the book and take appropriate measures to ensure everything is in order,” he said.

Although there is a centralised inspection system wherein EPFO records are checked online, officials commonly resort to manual inspections to obtain precise data.

Sources said some of the major bicycle manufacturing firms in Ludhiana may be evading provident fund payments to their workers and could be in trouble if this was established after EPF returns were scrutinized. “During Tuesday’s inspection some irregularities were detected. However, they will be verified before any punitive action is taken,” the sources said.

A few months ago the EPFO released a list of firms that have not filed EPF returns in which many local companies also figured. The EPFO head office in New Delhi was later asked to penalize such companies but this would be done only after a proper scrutiny of the relevant documents.

Meanwhile, Ludhiana provident fund commissioner PPS Maingi said in case any company was caught evading EPF, strict action would be taken against it.

The issue has assumed significance after companies filed their EPF returns for September in which they also submitted details about the new employees who were eligible for provident fund payments following the central government’s notification.

Local manufacturer raises eyebrows

A local firm manufacturing bicycle components, whose head is an office bearer of a major trade organisation, is also said to be under the EPFO scanner. What has raised eyebrows is that the number of employees at his firm who were eligible for provident fund payments have not increased following the central government’s notification.

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