by The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 has been enacted with the main objective of protecting the interest of the employees after their retirement and their dependents after death of the employee. The Act provides insurance to workers and their dependents against risks of old age, retirement, discharge, retrenchment or death.
The objective of this act is to provide substantial security and timely monetary assistance to the employer and their family members. This act covers all the state of India except Jammu and Kashmir. It applies to any factory or any other establishment employing 20 or more persons with the permission of central, according to central government’s official gazette. But the central government is empowered to apply this provision to any employing less than 20 persons with prior notification at least 2 months before.
EPF Applicability
The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 extends to whole of India except the state of Jammu & Kashmir.
It applies on every establishment employing 20 or more persons & engaged in industry specified in Schedule I of the Act or any other activity notified by the Central Government.
It applies to all departments / branches of an establishment wherever situated.
Any establishment employing even less than 20 persons can be covered voluntarily under section 1(4) of the Act.
EPF Eligibility
Employees drawing salary / wages at the time of joining up-to Rs. 6,500/- per month are governed by the provisions of the Act;
Employees drawing salary / wages more than Rs. 6,500/- per month may also be brought under the purview of the Act at the discretion of the management and by furnishing a joint undertaking to the Provident Fund Commissioner;
Employees engaged through the Contractor in or in connection with the work of an establishment are also covered under the purview of the Act.
This act covers three major schemes:
(i) Employees provident fund scheme.
(ii) Employees’ pension scheme.
(iii) Employees deposit linked insurance scheme.
Employee’s Contribution
An employee is eligible for membership of Employee Provident Fund from the very 1st date of joining in any establishment getting salary up to Rs6500 Provident fund contribution is recovered at 12% of wages from employee salary. The pension is that which represents a person has retired. To avail pension a person should have 10years of continues service and with age of 50years or more will receive pension amount on monthly basis after the age of 58. A member is eligible to apply for withdrawing his provident and pension fund only after 2 months from the date of registration, provident that he/she is not employed during those 2months. Employer’s Contribution: Employer is also required to contribute towards provident fund, the deduction rate is same as employee’s contribution i.e. 12% of the wages. Of this 12%, 3.67% goes to Provident Fund and the balance of 8.33% goes to Pension Fund.
Thus, Employee Provident Fund grants the employee to have a regular income through a pension. These are the important facts of Employee Provident Fund and Miscellaneous Provisions Act,1952.
The Employees’ Provident Fund Organisation (abbreviated to EPFO), is an organisation tasked to assist the Central Board of Trustees. Employees’ Provident Fund is a statutory body established by the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 and is under the administrative control of the Ministry of Labour and Employment, Government of India.
EPFO assists the Central Board in administering a compulsory contributory Provident Fund Scheme, a Pension Scheme and an Insurance Scheme for the workforce engaged in the organised sector in India. It is also the nodal agency for implementing Bilateral Social Security Agreements with other countries on a reciprocal basis. The schemes cover Indian workers as well as International workers (for countries with which bilateral agreements have been signed. As of now 19 Social Security Agreements are operational). The EPFO’s apex decision making body is the Central Board of Trustees (CBT).
On 1 October 2014, the government of India launched Universal Account Number for Employees covered by EPFO to enable PF number portability.
The total assets under management are more than ₹11 lakh crore (US$157.8 billion) as of 2018 .
