2. BUDGET PROPOSALS & EMPLOYEE PROVIDENT FUND ACT
Presented by
s.v.ramachandra rao
Managing director
Resource inputs limited

3. 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.

4. Developments in employee provident fund organization
Online registration of establishment :
Coverage of new establishment can be done online for assistance Tollfree no & e mail :
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.

5. 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 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 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.

6. Developments in employee provident fund organization
Any PF member can know his / her PF balance by visiting ‘know your EPF balance’ tab on
Any PF member can know his / her claim status by visiting ‘know your claim status’ tab on
Non operative PF account for 36 months will not earn interest.

7. Developments in employee provident fund organization
Mandatory filling of return Form 5A (return of ownership) on line by employer on or before
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.

8. 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
EDLI administrative charges 0.01% subject to a minimum of Rs. 200/-

9. 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/-

10. 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.

11. 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
EDLI death benefit
EPF Balance
Rs.3,60,000

12. 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 at a maximum pensionable salary of Rs. 6500/- and the period thereafter Rs. 15,000/-.

13. 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.

14. 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.

15. 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.

16. 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 allowance/leave encashment/ over-time
The above four things are not wages to attract EPF contributions (as excluded by the Act and the judgments).

17. 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.

18. 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.

19. DELAY IN PAYMENT- DAMAGES & INTEREST
Period of default
% rate of damages
% rate of interest
<2 months 5%
12%
2 months to 4 months
10%
4 months to 6 months
15%
6 months and above
25%
Damages can be levied only up to 100% of the EPF contribution default

20. Consumer Protection Act applies upon provident Fund Act
Consumer Protection Act, Will extend to the service provided by the EPF & MP Act.

21. International Worker and epf
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.

22. 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 )

23. 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).

24. 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)

25. 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)

26. 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.

27. 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

28. 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 are not covered under Pension Scheme

29. The Small Factories (Regulation of Employment and Conditions of Services) Bill 2014

30. 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

31. 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

32. 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.

33. 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 the employer to issue appointment order.

34. 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.

35. 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.

36. 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.

37. 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.

38. 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.

39. 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.

40. 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.

41. 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.

42. General Obligations of employer defined.
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.

43. Fine upto Rs. 5000/- or imprisonment of 3 months or both.
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.

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