EPFO more strict over employee PF contributions default
The EPFO highlighted the penalties that companies face for non-compliance in a tweet, reminding them of their legal duty to make monthly contributions to their employees' PF accounts.
Employers who neglect to make contributions to their employees’ Provident Fund (PF) accounts are facing a severe warning from the Employees’ Provident Fund Organization (EPFO).
The EPFO highlighted the penalties that companies face for non-compliance in a tweet, reminding them of their legal duty to make monthly contributions to their employees’ PF accounts.
The length of the missing contributions determines how severe the penalties are for employers who fail to make their payments on time. Employers that do not make contributions for a period of less than two months will be subject to a five percent annual penalty on the entire amount of contributions, according to the EPFO. If a default occurs between two and four months, the penalty rises to 10% annually.
Employers are subject to even harsher fines for longer delays. Companies that fail to make contributions for a period longer than four months but shorter than six months will be penalized 15% annually, and for a period longer than six months, they will be penalized 25% annually.
Employers also have a duty to pay simple interest at the rate of 12 percent per year on the total amount owed for the duration of the delinquency, with damages limited to 100% of the outstanding amount.
The EPFO stressed the significance of employers adhering to their legal duties to their employees and asked them to make sure that PF payments are paid on time in order to avoid these penalties.
This notice reminds them of their legal responsibilities to their employees, which is very important. Employers should take note of this reminder and make sure they follow the EPFO’s requirements on employee social security.
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