Provident Fund – Enrolment Campaign 2017
Introduction
The Ministry of Labour and Employment, Government of India has pursuant to its notification bearing
ref. no. G.S.R.1190 (E) dated 30 December 2016 notified the Employees’ Provident Funds (Seventh
Amendment) Scheme, 2016 (“Enrolment Campaign 2017”) giving an opportunity to defaulting companies
to register their employees as members under the Employees’ Provident Funds Scheme, 1952 (“the EPF
Scheme”) and make provident fund contributions (“PF Contribution”).
Effective Date
The Enrolment Campaign 2017 shall come into effect from 1 January 2017 and shall cease to operate
on the 31 March 2017.
The Enrolment Campaign 2017
In the EPF Scheme, a new paragraph 82A – Special provision in respect of Employees’ Enrolment
Campaign, 2017 has been inserted as follows:
(1) The Employees’ Enrolment Campaign, 2017 is effective from 1 January 2017 until 31 March
2017.
(2) Every employer who has failed to comply with the provisions of the EPF Scheme in relation to
membership of employees and contribution thereto to the provident fund (“Fund”), is required to
furnish to the Regional Provident Fund Commissioner (“PF Commissioner”), a declaration in the
prescribed form, in respect of membership of the employees, who were required or entitled to become
members of the Fund for the period beginning from 1 April 2009 and ending 31 December 2016 but were
not enrolled as members for any reason. The employer must specify in the declaration the date of
eligibility in respect of each employee for membership.
(3) Such declaration will be valid only in respect of employees who are alive as on 1 January
2017 and no proceedings under specified provisions1 have been initiated to determine the
eligibility for membership of such employees.
(4) Within 15 days of furnishing the declaration, the employer must remit the employer’s
contribution payable in accordance with the EPF Scheme and the employee’s contribution deducted
from the employee’s wages along with interest (at 12% p.a.) payable in accordance with section 7Q
of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (“the EPF Act”) and damages
(at Re 1 p.a.).
(5) The employer is not required to pay the employee’s contribution if such amount has not been
deducted from the wages of the employee. A proviso has been added to paragraph 30 of the EPF Scheme
clarifying that the member’s contribution 2016 is waived under the Enrolment Campaign
1 Section 7A of the EPF Act, paragraph 26B of the EPF Scheme or paragraph 8 of the Employees’
Pension Scheme, 1995.
January 2017
2017 for the period 1 April 2009 to 31 December 2016 where such contribution has not been
recovered from such member’s wages.
(6) Thereafter, the employer must file a return in the prescribed form to the PF
Commissioner.
(7) If the employer fails to remit the contribution, interest and damages payable by him as
above, then the declaration shall be deemed to have not been made by such employer.
(8) A declaration made by misrepresentation or suppression of facts will be void and be deemed
to have not been made and the person making such declaration shall be liable to penal action.
(9) Paragraph 39 of the EPF Scheme has been modified to clarify that there will be no
administrative charges payable under the Enrolment Campaign 2017 for the period 1 April 2009 to 31
December 2016 under paragraph 38(1).
To summarise and conclude:
Employers who have defaulted in enrolling their employees under the EPF Act and making PF
contributions for the period 1 April 2009 to 31 December 2016 have been given a 3 month window to
make good such default (i.e. prior to 31 March 2017). They are required to file a declaration and
make the payments within 15 days of filing such declaration. Whilst, the employer will need to pay
interest at 12%, they will be entitled to the following benefits:
(i) the employer will be exempt from paying the employees’ contribution if such amount was not
deducted from the employee’s salary;
(ii) the damages payable for such default under the Enrolment Campaign 2017 are negligible i.e.
only Rupee 1 per annum); and
(iii) there are no administrative charges payable under the Enrolment Campaign 2017.
Disclaimer
This news flash has been written for the general interest of our clients and professional
colleagues and is subject to change. It is not intended to be exhaustive or a substitute for legal
advice. We cannot assume legal liability for any errors or omissions. Specific advice must be
sought before taking any action pursuant to this news flash.
For further clarification and details on the above, you may write to the Labour & Employment team
comprising of Kruti Desai (Partner) at [email protected], and Shruti Tandon
(Associate) at
[email protected].