NGOs, whether registered as a public charitable trust, society under the Act of 1860 or a company u/s 8 (earlier u/s 25), are not specifically exempt from the provisions of the Employees’ Provident Fund (EPF) Act.
Employees' Provident Fund and Miscellaneous Provisions Act 1952 is applicable to, every establishment (including NGOs) employing 20 or more persons. The responsibility to comply under the Act lies on the employer (i.e. trustees, governing board members or directors).
NGO Employers who have defaulted in enrolling their employees under the EPF Act have been given a 3 month window to make good such default (i.e. prior to 31 March 2017). They are required to file a declaration and make the payments within 15 days of filing such declaration. Whilst, the employer will need to pay interest at 12%, they will be entitled to the following benefits:
- the employer will be exempt from paying the employees’ contribution if such amount was not deducted from the employee’s salary;
- the damages payable for such default under the Enrolment Campaign 2017 are negligible i.e. only Rupee 1 per annum); and
- there are no administrative charges payable under the Enrolment Campaign 2017.
The Enrolment Campaign 2017 has come into effect from 1st January 2017 and shall cease to operate on the 31 March 2017.
Every employer who has failed to comply with the provisions of the EPF Scheme in relation to membership of employees and contribution thereto to the provident fund (“Fund”), is required to furnish to the Regional Provident Fund Commissioner (“PF Commissioner”), a declaration in the prescribed form, in respect of membership of the employees, who were required or entitled to become members of the Fund for the period beginning from 1 April 2009 and ending 31 December 2016 but were not enrolled as members for any reason. The employer must specify in the declaration the date of eligibility in respect of each employee for membership.
Within 15 days of furnishing the declaration, the employer must remit the employer’s contribution payable in accordance with the EPF Scheme and the employee’s contribution deducted from the employee’s wages along with interest (at 12% p.a.) payable in accordance with section 7Q of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (“the EPF Act”) and damages (at Re 1 p.a.).
The employer is not required to pay the employee’s contribution if such amount has not been deducted from the wages of the employee. A proviso has been added to paragraph 30 of the EPF Scheme clarifying that the member’s contribution 2016 is waived under the Enrolment Campaign
2017 for the period 1 April 2009 to 31 December 2016 where such contribution has not been recovered from such member’s wages. Thereafter, the employer must file a return in the prescribed form to the PF Commissioner.
If the employer fails to remit the contribution, interest and damages payable by him as above, then the declaration shall be deemed to have not been made by such employer. A declaration made by misrepresentation or suppression of facts will be void and be deemed to have not been made and the person making such declaration shall be liable to penal action.
EPF Scheme has been modified to clarify that there will be no administrative charges payable under the Enrolment Campaign 2017 for the period 1 April 2009 to 31 December 2016.
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