Employees' Provident Funds & Misc. Provisions Act & The Schemes, 1952

Applicability

  • Every establishment which is a factory engaged in any industry specified in Schedule 1 and in which 20 or more persons are employed.
  • Any other establishment employing 20 or more persons which Central Government may, by notification, specify in this behalf.
  • Any establishment employing even less than 20 persons can be covered voluntarily u/s 1(4) of the Act.

Eligibility

All the employees (including casual, part time, Daily wage contract etc.) other then an excluded employee are required to be enrolled as members of the fund the day, the Act comes into force in such establishment.

Employee Definition

As defined in Section 2(f) of the Act, means any person who is employee for wages in any kind of work manual or otherwise, in or in connection with the work of an establishment and who gets wages directly or directly from the employer and includes any person employed by or through a contractor in or in connection with the work of the establishment.

Excluded Employee

Exempted employee means an employee to whom a Scheme or the Insurance Scheme, as the case may be, would, but for the exemption granted under section 17, have applied. However, if the wage of an employee as covered under the Act, exceeds the prescribed ceiling he will be continue to remain covered upto prescribed ceiling. Similarly, if a new employee is drawing more than the prescribed wages but he will not be coverable but if he has never been member of Fund, he will be covered upto the prescribe wage ceiling.

Basic Wages

"Basic Wages" means all emoluments which are earned by employee while on duty or on leave or holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash, but does not include:

  • The cash value of any food concession;
  • Any cash payment, by whatever named called, paid to an employee on account of a rise in the cost of living, House rent Allowance, Overtime Allowance, Bonus, Commission or any other allowance payable to the employee in respect of employment or of work done in such employment.

Damages On Default [per Annum]

Less than 2 months: @5%
2 months and above but less than 4 months: @10%
4 months and above but less than 6 months: @15%
4 months and above: @25%

Penal Provision

Liable to be arrested without warrant being a cognisable offence. Defaults by employer in paying contributions or inspection/adminis charges attract imprisonment upto 3 years and fine upto Rs.10,000 (S.14). For any 15 retrospective application, all dues have to be paid by employer with damages upto 100% of arrears.