Centre proposes to amend EPF Act

Centre proposes to amend EPF Act

Establishments with 10 or more staff to come under changed law

Centre proposes to amend EPF Act

The National Democratic Alliance (NDA) government proposes to amend the Employees’ Provident Fund (EPF) and Miscellaneous Provisions Act, 1952.

The amendment is aimed at bringing establishments with 10 or more employees under the ambit of Provident Fund laws. Earlier, only establishments with 20 or more employees came under its purview.

The amendment will also increase the quantum of punishment to employers who default in complying with the provisions of the law. It also proposes to downsize the number of trustees on the Central Board, drawn from both employee and employer organisations.

The original EPF Act came into force on March 14, 1952. It was last amended in 1998. The Labour Ministry—the administrative ministry of the Employees Provident Fund Organisation (EPFO)—has said in its note on the draft of the suggested amendments that they are necessary to suit “the changed economic scenario, employment pattern and social security needs of workers in the organised sector.”

The ministry has extended the time given to various stakeholders for giving suggestions from December 30, 2014, to Monday (January 12). The ministry is also planning to discuss the suggested changes at a tripartite meeting to be held on Tuesday (January 13) to be attended by trade unions and industry bodies.

The proposed amendment will reduce the number of employees organisation representatives on the Central Board, which administers the EPFO, from 10 to five. A similar reduction (from 10 to five) has been proposed for employer representatives as well.

Additionally, the representations from states is proposed to be reduced. Only eight states will be represented on the Central Board. Now, 15 states are on the board.

There is no change, however, in the number of representatives from the Centre, which will remain at five. Defaulting in complying with the provisions will invite more penalties.

The penalty for false representation of Rs 5,000 is proposed to be increased to Rs 35,000.
Penalty for defaulting on payment of the employee contribution after deducting it from the employee’s wages is proposed to increased from Rs 10,000 to Rs 70,000.

The penalty provisions have also been proposed to be increased for repeat offenders. If someone commits the same offence, the punishment is proposed to go up to five years with Rs 2 lakh as fine.

Earlier, the fine was up to Rs 25,000 only. The new provision includes a provision for minimum imprisonment of two years.

The government has also proposed to increase the number of members of the principal appellate tribunal to three. Currently it is a single-member committee represented by the judiciary only. The government proposes to appoint two members at the joint secretary level.
DH News Service