The Supreme Court has said that employers who fail to pay their contribution towards the Employees’ Provident Fund (EPF), are obliged to pay damages.
A bench comprising Justices Ajay Rastogi and Abhay S Oka ruled that the Employees’ Provident Fund & Miscellaneous Provisions Act provides for social security to the employees of any organisation or establishment with a workforce of at least 20 people. As per the Act, employers are obligated to compulsorily deduct a specific sum towards provident fund and deposit the same in the employees’ EPF accounts. Therefore, if they fail to make this deposit on time, they are liable to pay damages, whether or not there is any criminal intent behind their act.
The EPF schemes aim to fulfil the evolving needs of comprehensive social security in a transparent, contactless, faceless and paperless manner.
In 2020-21, it is reported that over eight and a half million new subscribers were added to the EPF scheme, but at the same time, over 9.78 million subscribers opted out of the scheme too.
In 2021-22 (till December 2021), the scheme witnessed about 7.9 million new subscribers while about 8.18 million opted out. This shows a clear picture of the status of jobs in the formal sector.
There are three schemes available. As per EPF Scheme 1952, the subscribes are eligible for accumulated amount plus interest upon retirement or death. The Pension Scheme 1995 (EPS) offers monthly benefit for superannuation/retirement, disability, survivor, widower and children. And as per the Insurance Scheme 1976 (EDLI), benefit is provided in case of subscriber employee’s death.
The benefit amount is 20 times that of the wages, with a maximum benefit of Rs 6 lakh.