Trade unions want timeline for employers on delayed contributions to EPFO

While the EPFO’s decision to push back deadline for payment of monthly statutory dues for a later date might have helped employers with much-needed liquidity, trade unions are of the view that the retirement fund body should set a definite timeline for employers to deposit the money already deducted from employee’s monthly salary.

As per rule, an employer needs to deposit the statutory contributions, amounting 25% of an employee’s monthly wage, for a wage month within the first 15 days of the next month. The EPFO earlier extended to May 15 the due date for depositing contributions for the wage month of March which was due to be paid by April 15.

On April 30, EPFO decided to separate the filing of monthly electronic challan-cum-return (ECR) from payment of statutory contributions reported in the ECR. “The ECR can now onwards be filed by an employer without the need of simultaneous payment of contributions and contributions may be paid later by the employer after filing the ECR,” it said in a statement. Sans any definite timeframe, the word ‘later’ has been left for conjecture.

Virjesh Upadhyay, All India general secretary of Bharatiya Mazdoor Sangh (BMS), said the EPFO should issue a communication soon clarifying the ambiguity that is there now and not keep the timeline open-ended.

“The EPFO should issue a communication on this. However, if an employer does not deposit the contributions even after the new deadline, EPFO will recover that money with penalty and interest. The employees’ money is safe,” said Upadhayay, who was till recently a member of the Central Board of Trustees (CBT), EPFO’s highest decision-making body.

CITU president K Hemalata said, “Unscrupulous employers who sit illegally on the employees’ provident fund money are to be fined with interest and penalty as per the law; but here the government is legalising the illegality. The provident fund collected from the employees should be immediately deposited with the EPFO. No leeway should be given.”

Pushing back of deadline by a month can provide around Rs 15,000 crore liquidity to around 6.5 lakh business establishments subscribed to the EPFO. The retirement fund body collected Rs 1,63,176 crore (revised estimate) as compulsory contribution from enterprises having 20 or more people on their payroll, in 2019-20. It estimates around Rs 1,81,709 crore (BE) collection in 2020-21.

Meanwhile, in a statement issued on Wednesday, the government said 9.6 lakh members of EPFO has taken benefit of online withdrawal of non-refundable advance from EPFO account, amounting to Rs 2,985 crore. Under Pradahan Mantri Garib Kalyan Yojana (PMGKY), launched on March 26, a provision for withdrawal from one’s provident fund accumulation to fight Covid-19 pandemic was announced by the government.

Subsequently, through an urgent notification, a new provision was introduced in the EPF scheme under which subscribers were allowed to avail non-refundable withdrawal up to three months’ wages and dearness allowance (DA) or up to 75% of the amount standing to member’s credit in the EPF account, whichever is less. So far, 24% EPF contribution has been transferred to 44.97 lakh employees’ account, amounting to Rs 698 crore, it said.