Monday, June 22, 2009

COVERAGE OF A RETIRED EMPLOYEE UNDER EPF ACT

There are two types of retired employees so far as Employees’Provident Funds and Miscellaneous Provisions Act, 1952 isconcerned :
1. Those who retire from the establishments including publicsector undertakings which are covered under theEmployees’ Provident Funds and Miscellaneous ProvisionsAct, 1952 and they were also members of the Fund and;
2. Those who retire after working in an establishment whichwas not covered under the aforesaid Act and the Schemeincluding in the Government service where Employees’Provident Funds Act did not apply.
In the former case, the retired employee from a coveredestablishment and having settled his Provident Funds accountfrom the Provident Fund Department or the Provident Fund Trust(even on attaining of 55 years age) will not be legally eligible orliable for Provident Fund membership on his employment orre-employment in a covered establishment albeit when his wage/salary is less then Rs.6500 per month. If either of the twoconditions are not fulfilled, the employee will be eligible andliable to be covered from the first day of joining at least onRs.6500 per month even when he is drawing more salary.
The term “excluded employees” is a product of the Employees’Provident Fund Scheme, 1952 as defined in clause (f) of para 2 asunder :“An employee whose pay at the time he is otherwise entitledto become a member of the Fund, exceeds six thousand andfive hundred rupees per month.
Explanation : ‘Pay’ includes basic wages with dearnessallowance, retaining allowance (if any) and cash value of foodconcessions admissible thereon.” “An excluded employee employed in or in connection withthe work of a factory or other establishment to which this Schemeapplies shall, on ceasing to be such an employee, be entitledand required to become a member of the fund from the date heceased to be such employee.” [para 26(3) of EPF Scheme]Persons who are retiring and settling their claim with theProvident Funds authorities after attaining the age of 55 yearswill be ‘excluded employees’. In this context, the word ‘Fund’ isimportant. It signifies that only those persons who have settledtheir claim with the Provident Fund established by the Employees’Provident Fund Act/Scheme or any other Fund covered under

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