The facility given to employers registered with the Employees’ Provident Fund Organisation (EPFO) to defer their statutory provident fund contributions for the wage month of March by a month may be extended for another 30 days. Firms may also be given a similar 30-day relief for depositing April EPF funds, the worst-affected month for business and the industry due to Covid-19.

The proposal, which has potential to provide around Rs 30,000-crore liquidity – Rs 15,000-crore dues for each wage month of March and April – in the hands of  employers, is under discussion in the Ministry of Labour and Employment, sources said.

However, when contacted, central provident fund commissioner Sunil Barthwal said, “We will wait till May 3 for further announcement, since filing of electronic challan-cum-return (ECR) date for April is up to May 15.”

Around 6.6 lakh establishments contributed to the EPFO in the last one year. Firms cumulatively contributed Rs 1,47,503 crore in 2018-19 towards EPFO. The cumulative contribution in 2019-20 went up to Rs 1,63,176 crore (revised estimate) which is likely to go up further to Rs 1,81,709 crore (BE) in 2020-21.

The due date for depositing statutory contributions, aggregating one-fourth of one employee’s monthly wages, towards provident fund, to be deposited by an employer, falls within the first 15 days of the next month. The contribution for the wage month of March, due by April 15, has been already extended to May 15.

The ministry’s directive on granting the grace period to employers for filing the ECR for the wage month March, however, comes with a caveat. Only those entities which have paid March wages to their employees will be able to avail of the benefit. They will have to declare the date of disbursement of wages for the month in the ECR for March.

The employers disbursing the wage for March 2020 not only get relief of extension of due date for payment of EPF dues for March 2020, but also avoid liability of interest and penalty, if they remit before May 15, 2020,” an official statement, issued on April 15, said.  

Aimed at preventing disruption in employment, the relaxation is an incentive to employers for wage payment to employees during the pandemic.

The Employees’ Provident Fund & Miscellaneous Provisions Act, 1952 makes it mandatory for factories and other establishments having 20 or more employees earning less than Rs 15,000 monthly wage to join the EPF scheme.