Ease of doing business for MSMEs: Among various compliances to adhere to as a young enterprise is the mandatory registration of a business with the Employees Provident Fund (EPF) scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Regulated by the government’s social security enterprise Employees’ Provident Fund Organisation (EPFO), EPF is applicable to all businesses employing 20 or more people.
The scheme enables organisations and employees to save money for the latter’s retirement and important/emergency events such as illness, higher education, marriage etc., as both employer and employee contribute to the PF account. The accumulated sum can benefit employees during such instances. While an employee contributes 12 per cent of his/her salary (12 per cent of basic salary plus dearness allowance), the employer has to contribute 3.67 per cent of the salary every month.
Importantly, the employee’s PF account remains common irrespective of the number of companies he/she works with during his lifetime as the account is transferable from one company to another.
The employee’s PF contribution is credited to his/her PF account every month while the interest earned (8.15 per cent for FY23) is deposited in the employee’s PF account on March 31st of the fiscal year.
Among the documents required for EPF registration by an employer are company details including name, date of incorporation, company’s PAN, copy of company’s bank cheque, address proof, company directors, employees’ identify proofs, details of partner/director of the company, etc.
Here’s how a new enterprise with an employee strength of 20 or more can register with EPF:
- Visit the EPF website – http://www.epfindia.gov.in/site_en/index.php and click on ‘Establishment Registration’.
- The Shram Suvidha portal by the Ministry of Labour and Employment will come up. Sign up for the portal and log in after signing up.
- Click on ‘Registration For EPFO-ESIC’ on the left vertical panel and then click on ‘Apply for New Registration’ on the right side of the screen.
- Among two options on the screen ‘Employees’ State Insurance Act, 1948’ and ‘Employees’ Provident Fund and Miscellaneous Provision Act, 1952’, select the second provident fund option and click on ‘Submit’.
- The registration form window will open with multiple tabs – Establishment Details, eContacts, Contact Persons, Identifiers, Employment Details, Branch/Division, Activities, and Attachments.
- While all tabs are self-explanatory, the Identifiers tab seeks license information such as CLRA (contract labour registration act) license.
- After filling information on the ‘Attachment’ page, click on ‘Save’.
- A summarised registration form will be displayed. Check the details and click on ‘Submit’.
- Click on ‘Digital Signature’ and attach your Digitial Signature Certificate (DSC) – here’s how you can register for DSC.
- A registration successful message will be displayed after uploading the DSC along with an email from the Shram Suvidha portal.
Registration is free of cost online for new enterprises. For multiple establishments or units, EPF registration for all units is required.