HomeNATIONEPFO Updates: 5 Facts about Employers' Contribution to EPF Accounts

EPFO Updates: 5 Facts about Employers’ Contribution to EPF Accounts

EPFO Updates: The Employees’ Provident Fund Organisation has certain provisions in place, in case of a defaulting employer. EPFO account holders must keep a tab on the contributions made to their account by employers.

A member contributes 12 percent of their basic salary towards their EPF and an equal amount is deposited by the employer. The contributions are made upfront by the employer.

By looking at the Passbook, one can find their annual Provident Fund statement and thus, an employee can determine the periods of default from the employer.

In case an employer fails to carry out their obligations, the account holder has a remedy that they can avail of. The EPFO can invoke penal provisions of the Act to recover the dues from the employer. Complaints can also be lodged with the police under section 406/409 of IPC by the EPFO for action against such employers.

Refusal of payment to the EPF account can make the employer liable for prosecution under Section 14 of the EPF & MP Act, 1952. 

All employees must know their rights as employees to avoid being swindled.

Here are 5 facts regarding an employer’s contribution to an EPF account:

1) It is a criminal offence for an employer to deduct his share of contribution from the wages of employees.

2) Under Section 12 of the EPF & MP Act, 1952, employers cannot reduce wages on account of payment to the EPF. 

3) An employee is entitled to full interest on the belated deposit of PF dues by the employer. After realising the dues, the employer must pay interest in full for each due month and it will in no way affect the interest on the contribution made by the member.

4) Employer is not liable to pay contributions if he is not in service or has left the organization.

5) The provident fund amount due to the employee will be paid only to the extent of the amount released by the employer.

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