EPFO not charging penalty from cos for delay in payment of provident fund dues

NEW DELHI: Retirement fund body EPFO has decided not to impose any penalty for delay in payment of employees’ provident fund contributions by firms during the natiowide

lockdown.

Since the imposition of

lockdown on March 25 by the government to contain the COVID-19 spread, businesses have been facing liquidity or cash crunch, leading to difficulties in paying their mandatory provident fund dues.

“During the lockdown period we are not going to impose any damages (penalty). This is our pro stakeholder/ businesses/employers attitude which we are following,” Employees’ Provident Fund Organisations (EPFO) Central Provident Fund Commissioner Sunil Barthwal said during a webinar organised by industry body PHDCCI on Friday.

The EPFO has a provision of charging damages or penalty from the employers who are unable to deposit PF contributions as mandated under the EPF Scheme 1952.

Employers are required to deposit dues on a month’s salary by 15th of the next month. However, they get 10 days grace for payment after that.

“Due to prolonged lockdown announced by the government to control the spread of COVID-19 and other disruptions due to pandemic, establishments covered under EPF & MP Act, 1952 are distressed and unable to function normally and pay the statutory contributions in time,” a labour ministry statement said later in the day.

The ministry stated, “Considering the difficulty faced by the establishments in timely deposit of contributions or administrative charges due for any period during lockdown, the EPFO has decided that such delays due to operational or economic reasons shall not be treated as default and penal damages should not be levied for such delay.”

It also said that a circular has been issued on May 15, 2020, to field offices of the EPFO provided that no proceeding shall be initiated for

levy of penal damages in such cases.

This step shall ease the compliance norms for 6.5 lakhs EPF covered establishments and save them from liability on account of penal damages, it added.

Earlier on April 30, the EPFO allowed employers to file monthly EPF returns without making simultaneous payment of dues, which gave a relief to about 6 lakh firms amid the

lockdown.

Under the scheme, employers are required to file employees provident fund returns and make payment of dues simultaneously.