BUDGET PROPOSALS
&
EMPLOYEE PROVIDENT FUND ACT
PRESENTED BY
S.V.RAMACHANDRA RAO
MANAGING DIRECTOR
RESOURCE INPUTS LIMITED
BUDGET ANNOUNCEMENTS ON PF & ESI
- Employee may opt for EPF or the New Pension Scheme (NPS)
- Employees below a certain threshold of monthly income,
contribution to EPF should be optional without affecting or
reducing the employer contribution.
- Employee should have the option of choosing either ESI or a
Health Insurance product recognized by IRDA
We intend to bring amending legislation, after stakeholder
consultation.
•
DEVELOPMENTS IN EMPLOYEE PROVIDENT
FUND ORGANIZATION
Online registration of establishment :
Coverage of new establishment can be done online
http://olre.epfoservices.in/ for assistance Tollfree no.
1800118005 & e mail : olre@epfindia.gov.in
• Allotment of Universal Account Number (UAN) – all
members are required to provide bank account details and
aadhar number .
• Online remittance of EPF contributions should be made
within 12 days of generation of EPF challan.
DEVELOPMENTS IN EMPLOYEE PROVIDENT
FUND ORGANIZATION
• Any person can find out the registration status of any
establishment by providing its name and address etc on –
Establishment search tab on www.epfindia.com and find
against whom the PF payments have been made in each
month.
• Grievances of any employee or employer can be
submitted and redressed through EPFiGMS tab
www.epfindia.com. Redressal is assured within 30 days.
• Transfer claims can be submitted on line using UAN user
id and pass word and submit hard copy of Form 13
(online transfer claim portal) OTCP.
•
DEVELOPMENTS IN EMPLOYEE PROVIDENT
FUND ORGANIZATION
Any PF member can know his / her PF balance by
visiting ‘know your EPF balance’ tab on
www.epfindia.com
• Any PF member can know his / her claim status by
visiting ‘know your claim status’ tab on
www.epfindia.com
• Non operative PF account for 36 months will not earn
interest.
DEVELOPMENTS IN EMPLOYEE PROVIDENT
FUND ORGANIZATION
•
Mandatory filling of return Form 5A (return of
ownership) on line by employer on or before 31.3.2015.
Name correction
Members who wish to get their name to be changed /
corrected in EPF database can apply through their
employer to the concerned EPFO office along with
supporting documents.
Wage Ceiling with effect from 1.9.2014
• For Provident Fund Contributions – Rs. 15,000/• For Pension Fund contributions – Rs. 15,000/-
• For EDLI contributions – Rs. 15,000/-
Reduction in rate of administrative charges
• PF administrative charges From 1.10% to 0.85% with effect from
1.1.2015.
• EDLI administrative charges 0.01% subject to a minimum of Rs.
200/-
NEW EMPLOYEES
•
•
To submit declaration in Form 11
If the new employee whose wage is more than Rs.
15,000/- and who was a member in E P F and not
withdrawn the amounts, he / she should be covered
under PF even though the wage is more than Rs.
15,000/-
NEW EMPLOYEES
•
If the new employee whose wage is more than Rs. 15,000/and not a member of EPF earlier, covering him / her under E
P F is optional.
•
New employees whose pay is more than Rs. 15,000/- and
getting enrolled under EPF for the first time are not entitled
to become a member under Employees Pension Scheme
1995, but can become a member of E P F contributing the
entire employee and employer share to P F account.
PENSION & EDLI WITH EFFECT FROM 1.9.2014
Minimum
Maximum
Pension (member/widow
(or)/disablement pension
Rs. 1000
Rs. 7500
Orphan Pension
Rs. 750
Rs. 5625
Children Pension
Rs. 250
Rs. 1875
EPF Balance
Rs.3,60,000
EDLI death benefit
Pension Scheme
• The pensionable salary shall be average monthly pay
drawn during contributory period of service in the
span of preceding 60 months.
•
Members pension shall be determined on a pro-rata
basis for the service upto 1.9.2014 at a maximum
pensionable salary of Rs. 6500/- and the period
thereafter Rs. 15,000/-.
SOME IMPORTANT POINTS IN
EPF
Director of a company
•
The Patna High Court has held that the directors are not
‘employees’ even if they get remuneration.
No distinction between regular or casual
employees
•
Provident Funds Act does not distinguish between regular
employee or casual or those engaged through the contractor.
Drivers & conductors of school
buses
• A school, covered under the Employees’ Provident Funds
Act, will not be liable for payment of contributions of the
employees such as drivers, conductors or the cleaners as
engaged by the transport contractor for providing
transportation to the students and the staff since the
Management has been paying for each trip of the buses and
did not have any casual or even remote connection over the
employees as engaged by the contractor by the contractor
who were not working at the premises.
PRINCIPAL EMPLOYER LIABLE
IF CONTRACTOR FAILS TO
DEPOSIT CONTRIBUTION
The employees working in connection with the work of
an establishment under the overall control of the
principal employer, getting wages directly from the
principal employer through contractor fall within the
purview of ‘employees’ as defined under section 2(f) of
the Employees’ Provident Funds & Miscellaneous
Provisions Act, 1952, the principal employer is liable to
pay EPF dues in respect of such employees, in case the
contractor fails for the same.
Limitation for recovery of contributions
The Employees’ Provident Funds & Miscellaneous
Provisions Act, 1952 does not prescribe any period of
limitation to initiate proceedings for recovery of the EPF
dues including damages and interest from the employer.
Provisions of The Limitation Act, 1963 are not attracted in
such cases.
Notice pay/ suspension
encashment/ over-time
allowance/leave
The above four things are not wages to attract EPF
contributions (as excluded by the Act and the judgments).
Reducing employers’ share – permissible
In one case, Marathwada Garmin Bank Karamchari
Sanghatana and another vs. Management of Marathwada
Gramin Bank and oters, 2011 LLR 1130, the supreme Court
has held that if an employer is contribution its share on
more than the prescribed wage cap under the Provident
Fund Act, it is permissible to reduce it up to the statutory
wage cap.
Contribution be payable even when
wages are not paid
In one case, the question arose as to whether the Employees’
Provident Funds contributions are to be paid only when the
actual wages are paid. It has been clarified that payment of
contribution is to be deducted from the wages hence it does not
mean that the liability will accrue only when the wages are
paid. Pay ability starts form the date when it accrues. If the
employer makes the payment of wages at his convenience,
held, the same will not enable the employer to pay contribution
also at his whims for reasons which may or may not be
justifiable.
DELAY IN PAYMENT- DAMAGES &
INTEREST
Period of default
% rate of damages
% rate of interest
<2 months
5%
12%
2 months to 4 months
10%
12%
4 months to 6 months
15%
12%
6 months and above
25%
12%
•
Damages can be levied only up to 100% of the EPF contribution default
CONSUMER PROTECTION ACT
APPLIES UPON PROVIDENT
FUND ACT
•
Consumer Protection Act, Will extend to the service
provided by the EPF & MP Act.
INTERNATIONAL WORKER AND EPF
International Worker
• An employee other than an Indian employee,
holding other than an Indian Passport, working
for an establishment in India to which the EPF
& M P Act, 1952 applies.
Who is an ‘excluding employee’
under International Worker
• A detached International Worker contributing to a social
security programme of the home country and certified as
such by a Detachment Certificate for a specified period in
terms of the bilateral SSA signed between that country and
India.
(OR )
• An International Worker, who is contributing to
a social security programme of his country of
origin with whom India has entered in to a
bilateral comprehensive economic agreement or
India has entered into Social Security Agreement
(SSA).
COUNTRIES WITH WHOM INDIA
HAS SOCIAL SECURITY
AGREEMENT (13 COUNTRIES)
•
•
•
•
•
•
•
Belgium (1st Sep 2009)
Germany (1st Oct 2009)
Switzerland (29th Jan 2011)
Denmark (1st May 2011)
Luxembourg ( 1st June 2011)
France (1st July 2011)
South Korea ( 1st Nov 2011)
•
•
•
•
•
Netherlands ( 1st Dec 2011)
Hungary ( 1st Apr 2013)
Sweden (1st Aug 2014)
Finland (1st Aug 2014)
Czech Rep (1st Sep 2014)
•
Norway ( 1st Jan 2015)
TO WHICH ESTABLISHMENTS
THESE PROVISIONS WILL
APPLY
To all establishments covered under EPF Act
and also to the exempted establishments under
Section 17 of the Act.
INTERNATIONAL WORKER
COVERAGE & CONTRIBUTIONS
•
International Worker should be covered irrespective of
their salary limit i.e. International Worker with salary
above Rs. 15,000/-
•
PF should be contributed on the total salary without any
ceiling on the salary
•
PF is payable even if the salary is paid out side India
•
International Worker employed in India and drawing salary
in other country currency should also be covered under PF
• Even if the International Worker is covered under split pay
roll due to work in different countries, PF is payable on the
total salary earned by the employee in the establishment in
India
• International Worker having work responsibility of multiple
countries is also covered and contributions are payable on
the total salary.
• International Worker who work for short durations in India
also should be covered under P F
• International Worker covered under EPF on or after
1.9.2014 are not covered under Pension Scheme
THE SMALL FACTORIES
(REGULATION OF EMPLOYMENT
AND CONDITIONS OF SERVICES)
BILL 2014
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
Non application of laws to small factories:
The Factories Act, 1948
The Industrial Disputes Act, 1947
The Industrial Employment (S O) Act, 1946
The Minimum Wages Act, 1948
The Payment of Wages Act, 1936
The Payment of Bonus Act, 1965
The Employee State Insurance Act, 1948
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
 The E P F Act, 1952
 The Maternity Benefit Act, 1961
 The Employee Compensation Act, 1923
 The Inter State Migrant Workmen(RECS)Act, 1979
 Shops & Establishments Act (State)
 The Equal Remuneration Act, 1976
 The Child Labour (Prohibition & Regulation) Act,
1986
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
Factory Registration : Make application electronically
on the web site of the State Government and if not
available website of Central Government.
Payment of wages before 7th through bank.
Employer responsible to get bank account to the
employee.
Minimum Wages shall be paid.
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
 Bonus 8.33% of wages earned within 6 months
from close of the Financial Year. Wages shall
mean all remuneration including allowances.
 No discrimination against female workers.
 Responsibility of
appointment order.
the
employer
to
issue
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
Absence: Any worker after marking
attendance found absent from
proper place of work shall be liable
to be treated as absent from duty. If
it is before lunch break treated as
full day and if it is after lunch break
treated as half day.
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
Absence: If ten or more worker acting in
concerted manner remain absent
from duty without due notice and
reasonable cause, the employer shall
be entitled to mark them absent and
deduct 8 days wages of each worker.
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
LEAVES & HOLIDAYS
8 Holidays in a year.
7 days Casual Leave & 7 days Sick Leave (shall be
credited on quarterly basis).
20 days EL provided 240 days worked & accumulation
45 days.
90 days paid maternity Leave.
30 days in case of miscarriage.
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
Provident Fund :
Employer & Worker shall contribute 10% of the
wages, provided this amount shall not be less
than 10% of the consolidated wages
announced by Government under Minimum
Wages Act.
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
Health Insurance:
Employer & Worker shall contribute 10% of
wages towards insurance which shall
include injury or death arising out of and in
course of employment.
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
Gratuity:
Applicable if the small factory has 10 or more
workers.
Worker who worked for not less than 60 months
is entitled to gratuity.
Employer to obtain gratuity insurance scheme.
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
Retrenchment & Termination of Service
One month notice.
15 days wages per year of service.
Abandonment by worker or the refusal of the
worker to resume work shall not fall under
retrenchment.
Last come first go principle to be followed.
If not followed reasons to be recorded.
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
Collective Dispute:
Not less than 51% of workers or Trade Union of
workers may raise a dispute about general
demands.
 If dispute not settled within 90 days it should be
referred to Labour Court.
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
General Obligations of employer defined.
General Obligations of worker defined.
Records can be maintained in soft copy or
hard copy or placed on the web site.
Creche to be provided if 20 or more women
workers are working.
The Small Factories (Regulation of Employment and
Conditions of Services) Bill 2014
Penalty
Fine upto Rs. 5000/- or imprisonment of 3
months or both.
In case of serious bodily injury by fine of Rs.
25,000/-.
Factories Act will be applicable only to factories
carrying on hazardous manufacturing process.
ABOUT US
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distinctive assortment of services wherein we
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to everyday.
OUR VISION
•
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OUR MISSION
•
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