Type:Preventive Compliance Frequency: Specific Day

Action to be taken:
Ensure that the employer and employee contributions are paid as per percentage and definition of wages provided in the Act under its various schemes and paid into the appropriate funds. Deduct employees contributions from their wages. Allow employees to have deducted, an amount greater than the statutory deduction. Pay the sum of both employers and employees contributions by bank draft or local cheque within 15 days of the close of the month in the manner specified in Paras 29,38 of the EPF Scheme, Para 3 of the Pension Scheme and Para 8 of the EDLIS Scheme


Audit Requirement:
Are contributions towards PF, Pension Scheme and EDLIS being made into the funds as per the provisions of the act for all eligible employees within 15 days of the close of each month ? Are Employees permitted to raise their contributions towards PF ?

Supporting Documents:
Legal Opinion on Applicability of Schemes, Percentage of Contributions and definition of basic wage

To be complied on the following days every year
15-January; 15-February; 15-March; 15-April; 15-May; 15-June; 15-July; 15-August; 15-September; 15-October; 15-November; 15-December;
Related Triggers:
Deduction or Fine From Wages
Payment of Wages

Related Keywords:
Contributions
Deduction/Fine From Wages
Provident Fund
Remuneration/Wages/Compensation

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Related Sections:
Employees Provident Fund and Miscellaneous Provisions Act, 1952
6:Contributions and matters which may be provided for in Schemes:
The contribution which shall be paid by the employer to the Fund shall be twelve per cent of the basic wages, dearness allowance and retaining allowance (if any), for the time being payable to each of the employees, (whether employed by him directly or by or through a contractor), and the employees contribution shall be equal to the contribution payable by the employer in respect of him and may, if any employee so desires, be an amount exceeding twelve per cent of his basic wages, dearness allowance and retaining allowance (if any), subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section:
Provided that in its application to any establishment or class of establishments which the Central Government, after making such inquiry as it deems fit, may, by notification in the Official Gazette specify, this section shall be subject to the modification that for the words twelve per cent, at both the places where they occur, the words twelve per cent shall be substituted:
Provided further that where the amount of any contribution payable under this Act involves a fraction of a rupee, the Scheme may provide for the rounding off of such fraction to the nearest rupee, half of a rupee or quarter of a rupee.
Explanation 1.- For the purposes of this section dearness allowance shall be deemed to include also the cash value of any food concession allowed to the employee.
Explanation 2.- For the purposes of this section "retaining allowance" means an allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working, for retaining his services. Employees Deposit Linked Insurance Scheme, 1976
7:Contribution:
(1) The Contribution payable by the employer and the Central Government under sub-section (2) and sub-section (3) of Section 6-C of the Act, shall be calculated on the basis of the basic wages, dearness allowance (including the cash value of any food concession) and retaining allowance, if any, actually drawn during the whole month whether paid on daily, weekly, fortnight or monthly basis:

Provided that where the monthly pay of an employee exceeds six thousand five hundred rupees, the contribution payable in respect of him by the employer and the Central Government shall be limited to the amounts payable on a monthly pay of six thousand five hundred rupees including dearness allowance retaining allowance (if any ) and cash value of food concession.

(2) Each contribution shall be calculated to the nearest rupees, 50 paise or more to be counted as the next higher rupee and fraction of a rupee less than 50 paise to be ignored. Employees Deposit Linked Insurance Scheme, 1976
8:Mode of payment of contribution:
(1) The contribution by the employer shall be remitted by him together with administrative charges at such rate as the Central Government may fix from time to time under sub-section (4) of Section 6-C of the Act, to the Insurance Fund within fifteen days of the close of every month by a separate bank draft or cheque or by remittance in case in such manner as may be specified in this behalf by the Commissioner. The cost of remittance, if any, shall be borne by the employer.

(2) It shall be the responsibility of the employer to pay the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.

(3) The Central Government shall credit its contribution to the Insurance Fund as soon as possible after the close of every financial year.

(4) The Commissioner shall deposit the bank draft or cheque received from the employers in the State Bank of India or any Bank specified in the First Schedule to the Banking Companies (Acquisition and Transfer of Undertaking ) Act, 1970 (5 of 1970). Employees Deposit Linked Insurance Scheme, 1976
8-A:Recovery of damages for default in payment of any contribution:
(1) Where an employer makes default in the payment of any contribution to the Insurance Fund, or in the payment of any charges payable under any other provisions of the act or of the Scheme, the Central Provident Fund Commissioner or such officer as may be authorised by the Central Government, by notification in the Official Gazette, in this behalf, may recover from the employer by way of penalty, damages at the rates given below:-

Period of Default - Rate of damages (Percentages of arrears per annum)
________________________________________________________
(a) Less than two months - Five

(b) Two months and above but less than four months - Ten

(c) Four months and above but less than six months - Fifteen

(d) Six months and above - Twenty five
________________________________________________________

2) The damages shall be calculated to the nearest rupees, 50 paise or more to be counted as the next higher rupee and fraction of a rupees less than 50 paise to be ignored. Employees Pension Scheme, 1995
3:Employees Pension Fund:
(1) From and out of the contribution payable by the employer in each month under Section 6 of the Act or under the rules of the Provident Fund of the establishment which is exempted either under clauses (a) and (b) of sub-Section (1) of Section 17 of the Act or whose employees are exempted under either paragraph 27 or Paragraph 27-A of the employees' Provident Funds Scheme, 1952, a part of contribution representing 8.33 per cent of the employees' pay shall be remitted by the employer to the Employees' Pension Fund within 15 days of the close of every month by a separate bank draft or cheque on account of the Employees' Pension Fund contribution in such manner as may be specified in this behalf by the Commissioner. The cost of the remittance, if any, shall be borne by the employer.
(2) The Central Government shall also contribute at the rate of 1.16 per cent of the pay of the members of the employees' Pension Scheme and credit the contribution to the employees' Pension Fund:
Provided that where the pay of the member exceeds rupees five thousand per month the contribution payable by the employer and the Central Government be limited to the amount payable on his pay of rupees five thousand only.
(3) Each contribution payable under sub-paragraph (1) and (2) shall be calculated to the nearest rupee, fifty paise or more to be counted as the next higher rupee and fraction of a rupee less than fifty paise to be ignored.
(4) The net assets of the Family Pension Scheme, 1971 shall vest in and stand transferred to the Employees' Pension Fund. Employees Pension Scheme, 1995
4:Payment of contribution:
(1) The employer shall pay the contribution payable to the Employees Pension Fund in respect of each member of the Employees Pension Fund employed by him directly or by or through a contractor.
(2) It shall be the responsibility of the principal employer to pay the contributions payable to the Employees Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.
Provided that the Central Government shall pay the contribution payable to the Employees Pension Fund in respect of an employee who is a person with disability under the Persons with Disabilities(Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) and under the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1994 (44 of 1999) respectively, up to a maximum period of three years from the date of commencement of membership of the Fund.
Employees Provident Fund Scheme, 1952
Chapter:Contributions| 30:Payment of contribution:
(1) The employer shall, in the first instance, pay both the contribution payable by himself (in this Scheme referred to as the employer's contribution) and, also on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member (in the Scheme referred to as the member's contribution).

(2) In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee (in the Scheme referred to as the member's contribution ) and shall pay to the principal employer the amount of member's contribution so deducted together with an equal amount of contribution (in the Scheme referred to as the employer's contribution) and also administrative charges.

(3) It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges .
Explanation.-For the purposes of this paragraph the expression "administrative charges" means such percentage of the pay (basic wages, dearness allowances, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than an excluded employee and in respect of which provident fund contributions are payable as the Central Government may, in consultation with the Central Board and having regard to the resources of the Fund for meeting its normal administrative expenses fix.
Employees Provident Fund Scheme, 1952
Chapter:Contributions| 31:Employers share not to be deducted from the members:
Notwithstanding any contract to the contrary the employer shall not be entitled to deduct the employer's contribution from the wage of a member or otherwise to recover it from him.


Employees Provident Fund Scheme, 1952
Chapter:Contributions| 32:Recovery of a member's share or contribution:
(1) The amount of a member's contribution paid by the employer or a contractor shall, notwithstanding the provisions in this Scheme or any law for the time being in force or any contract to the contrary, be recoverable by means of deduction from the wages of the member and otherwise :

Provided that no such deduction may be made from any wage other than that which is paid in respect of the period or part of the period in respect of which the contribution is payable :

Provided further that the employer or a contractor shall be entitled to recover the employee's share from a wage other than that which is paid in respect of the period for which the contribution has been paid or is payable where the employee has in writing given a false declaration at the time of joining service with the said employer or a contractor that he was not already a member of the Fund:

Provided further that where no such deduction has been made on account of an accidental mistake or a clerical error, such deduction may, with the consent in writing of the Inspector, be made form the subsequent wages.

(2) Deduction made from the wages of a member paid on daily, weekly or fortnightly basis should be totalled up to indicate the monthly deductions.

(3) Any sum deducted by an employer or a contractor from the wages of an employee under this Scheme shall be deemed to have been entrusted to him for the purpose of paying the contribution in respect of which it was deducted.
Employees Provident Fund Scheme, 1952
Chapter:Declaration, Contribution Cards and Returns| 38:Mode of payment of contributions:
(1) The employer shall, before paying the member his wages in respect of any period or part of period for which contribution are payable, deduct the employees contribution from his wages which together with his own contribution as well as an administrative charge of such percentage of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than an excluded employee and in respect of which provident fund contribution are payable, as the Central Government may fix, he shall within fifteen days of the close of every month pay the same to the Fund by separate bank drafts or cheques on account of contributions and administrative charge :

Provided that if the payment is made by a cheque, it should be drawn only on the local bank of the place in which deposits are, made:

Provided further that where there is no branch of the Reserve Bank or the State Bank of India at the station where the factory or other establishment is situated, the employer shall pay to the Fund the amount mentioned above by means of Reserve Bank of India Governmental drafts at par separately on account of contributions and administrative charge.

(2) The employer shall forward to the Commissioner within twenty-five days of close of the month, a monthly abstract in such form as the Commissioner may specify showing the aggregate amount of recoveries made from the wages of all the members and the aggregate amount contributed by the employer in respect of all such members for the month :

Provided that an employer shall send a Nil return, if no such recoveries have been made from the employees:

Provided further that in the case of any such employee who has become a member of the Pension fund under the Employees Pension Scheme, 1995, the aforesaid Form shall also contain such particulars as are necessary to comply with the requirements of that scheme.

(3) The employer shall send to the Commissioner within one month of the close of the period of currency, a consolidated Annual Contribution Statement in Form 6-A,showing the total amount of recoveries made during the period of currency from the wages of each member and the total amount contributed by the employer in respect of each such member for the said period. The employer shall maintain on his record duplicate copies of the aforesaid monthly abstract and consolidated annual contribution statement for production at the time of inspection by the Inspector.

Provided that the employer shall send to the Commissioner returns or details as required under sub paragraphs
(2) and (3) above, in electronic format also, in such form and manner as may be specified by the Commissioner.