In a tweet on Thursday, Employees Provident Fund Organisation (EPFO) warned employers about missing PF contributions to their employees’ PF accounts. “Employers defaulting on contributions are liable to pay damages u/s 14B and interest u/s 7Q on the amount due,” EPFO said.
The EPFO said that employers failing to contribute to EPF for different durations will have to pay penalties at different rates. In this write-up, we will tell you what the EPFO rules are for defaulter employers.
In its tweet, EPFO says that if the duration of default (of not contributing to EPF) is less than two months, the employer has to pay 5 percent per annum of the total contribution to the employee’s fund.
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Those who default for two to four months will have to pay damages at 10 percent per annum.
For missing contributions to an employee’s PF account, the employer is bound to pay a penalty of 15 percent per annum of the total contribution.
If the employer misses it for more than six months, the penalty is 25 percent per annum of the total contribution.
“Damages are restricted up to 100 percent of the amount in arrears. Simple interest at 12 percent p.a. is payable on the amount due for the entire period of the day.
Employers should ensure timely payment of EPF dues to avoid damages and interest, EPFO said in the tweet.
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