One of the World’s largest Social Security Organisations, The Employees’ Provident Fund Organisation (EPFO) employers defaulting on contributions are liable to pay damages and Interest on the amount due.
The Employees Provident Fund Organisation said that employers defaulting on contributions are liable to pay Damages u/s 14B and interest u/s 7Q on the due amount.
The employers should ensure timely payment of EPF dues to avoid damages and interest. In case of delay in payment by the employers will cause the following:-
- Damages are restricted up to 100% of the amount in arrears.
- Simple Interest @12% is payable on the amount due for the entire period of delay.
Damages are levied at the following interest rates:
| Period of Default | Rate of Damages |
| Period less than 2 months | 5% per Annum |
| 2-4 months | 10% per Annum |
| 4-6 months | 15% per Annum |
| More than 6 months | 25% per Annum |
Employers should ensure timely payment of EPF dues to avoid damages and interest.
EPFO has recently shared a tweet through an official Twitter handle saying, “Employers defaulting on contributions are liable to pay Damages & Interest on the amount due.”
Employers defaulting on contributions are liable to pay Damages & Interest on the amount due.#AmritMahotsav #epfowithyou #epf #epfo #HumHaiNa #पीएफ #ईपीएफ #employers@PMOIndia @byadavbjp @Rameswar_Teli@LabourMinistry @PIB_India @MIB_India@AmritMahotsav @MyGovIndia pic.twitter.com/oPj1O6A7zt
— EPFO (@socialepfo) September 9, 2023
Recently, EPFO has issued a fresh standard operating procedure (SOP).
These SOPs describe the process and proposals of establishments seeking exemptions from the operation of the Employee Provident Fund (EPF) scheme.
Establishments that seek to maintain their own Provident Fund Trusts apply for a grant of exemption under Section 17 of the EPF & MP Act, 1952 (Act).
While exemption for the establishment as a whole is regulated by Section 17(1) of the EPF Act, the exemption for a class of employees is regulated by Section 17(2) of the Act; the enabling provision enshrined in Para 27A of the EPF Scheme, 1952.
This Standard Operating Procedure (SOP) defines the documents, the proper channel, role, responsibilities, and procedures for time-bound processing of the grant of exemption cases.
Standard Operating Procedure describes the process through which the proposals of exemptions are to be examined and forwarded with recommendations by the field offices to the Head Office, EPFO.
The Head Office examines and obtains recommendations from its committees and the Central Board to communicate for the consideration of the appropriate Government.