The Employees’ Provident Fund Organisation (EPFO) has issued a warning to employers who fail to contribute to their employees’ Provident Fund (PF) accounts. The EPFO reminded employers of their legal obligation to contribute to their employees’ PF accounts every month and the penalties they face for not complying with it.
Employers who miss their contributions for less than two months will have to pay a penalty of 5% per annum on the total contribution amount. If the defaults are between two and four months, the penalty increases to 10% per annum. For more significant delays, employers face even steeper penalties. Those who miss contributions for more than four months but less than six months will have to pay a 15% per annum penalty, while those exceeding six months face a 25% per annum penalty.
In addition to these penalties, employers are obligated to pay damages capped at 100% of the outstanding amount, along with simple interest at 12% per annum on the entire outstanding amount for the entire period of default.
The EPFO urged employers to ensure timely payment of PF contributions to avoid incurring these penalties and emphasised the importance of complying with their legal obligations towards their employees. This reminder serves as a crucial message for employers to prioritize their employees’ social security and adhere to the regulations established by the EPFO.
