PF attract for overtime wages?

QUESTION---"Whether this over time wages will attract PF Contribution for both employee and employer"

ANSWER --OT is not wages under EPF &MP Act,1952 ,so pf will not be deducted on OT.ESI contribution is payable on overtime wages but PF contribution is not.

Late submission of PF Return

QUESTION---- If an organisation submits the monthly as well as yearly return late, thus is there any penalty for this? Kindly be specific both in case of monthly as well as yearly late submission of PF return.

ANSWER-- Section 14 of the pf Act deals with penalties and 32-A deals with damages.

where an employer 1. makes default in the payment of any contribution to the provident fund or pension fund or insurance fund or, 2. makes default in the transfer of accumulations required to be transferred by him or,3. makes default in the payment of any charges payable under the act or scheme may be recovered from the employer b;y way of penalty,damages at the following rates.

1. less than 2 months- 17% p.a 2. 2 months and above but less than 4 months- 22% p.a. 3. 4 months and above but less than 6 months- 27% p.a.4. 6 months and above -37% ( para 32A of EPF scheme)

OFFENCES AND PENALTIES are specified in para 14 of the EPF Act.

in that if an employer fails to pay contribution, submit returnsetc.,he shall be punishable with imprisonment which may extend to one year or with fine which may extend to rs.4000/ under the provident fund scheme and the insurance scheme rs. 5000/ under pension scheme or with both 1. he deducts or attempts to deduct from the wages or other remuneration of the member the whole or any part of the employers contribution, or he fails or refuses to submit any return, statement or other document required by this scheme or submits a false return statement or other document or makes a false declaration, or he obstrucs any inspector or other official appointed under this act or this scheme in discharge of this duties or fails to produce any record for inspection by such inspector or other official or he is guilty of contravention of or non-compliance with any other requirement of theis scheme. ( para 76 of EPF,para 42 of EPS, para 29 of edli scheme)

hence to sumup the employer is both liable for damages and penalities if he contravenes the law.

PF deduction on Leave Encashment

QUESTION--- whether there will be any PF deduction from leave encashment during his full & final settlement?

ANSWER------No PF is not applicable on Leave Encashment.

Please refer to CASE NO.: Appeal (civil) 1832 of 2004

Also PF Authority has issue a circular on 05/05/2008 which also indicate that PF is not liable on Leave Encashment.

PETITIONER:

Manipal Academy of Higher Education

RESPONDENT:

Provident Fund Commissioner

DATE OF JUDGMENT: 12/03/2008

Contract Labour

QUESTION------ who will be responsible for remitance of PF of contract labour?

ANSWER---------As per Section 2 (f) of the Employees Provident Funds and Misc. Provisions Act, an employee is defiend as any person employed in any kind of work, and who gets its wages direcly or indirectly from the employer, and includes any person employeed by or through a Contractor, in or in connection with the work of the establishment.

Therefore taking the literal meaning of the section, the Prinicpal employer can also be held responsible for payment of PF contribution.

But there are also ceratin safeguards for the Pricipal Employer.

The liability only arises, when the Contractor, defaults in making the PF contribution. In such a case, it would be always advisable to take a seperate PF Code for the Contractors, and deposit the Contribution in there. All amounts so deposited can be recovered from the contractor, as per the provisions of Section 8 of the Act.

I would secondly suggest that you have a inbuilt clause in the Contractor Agreement, which directs the Contractor to comply with the provisions of all Labour Laws, including minimum wages act, and further an indemnity clause, wherein the contractor should indemnify the Company, against all claims and damages, arising out of non compliances of any labour Laws, and should reimburse all costs and expenses arising out of the same..