PF – ESIC Registration & Compliance
PF – ESIC Registration & Compliance
The EPF & MP Act, 1952, and the schemes framed thereunder are meant to provide Social Security in the form of Provident Fund, Pension and Insurance to all the employees who are employed for wages, in or in connection with the work of an establishment. The Employees Provident Fund Organization is entrusted to administer the Act, and in case of default, the Principal Employer is liable to penal action.
The Employees’ Provident Fund and Miscellaneous Provisions Act 1952 applies to the Factories engaged in Industries specified in Schedule I of the Act or to other establishments notified and engaging 20 or more employees. Further, a business entity which is not statutorily required to register can register themselves under this act voluntarily. Therefore, Companies with more than 20 employees (including contract workers) compulsorily have to register under the EPF Scheme. Once the entity gets covered under that PF Laws, then it continues to get covered even if the number of employees drops below 20.
Who is an "employee" for PF?
The term "employee" has been defined to mean any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment and who gets his wages directly or indirectly from the employer and includes any person employed by or through a contractor in or in connection with the work of the establishment. The Act does not differentiate between casual, contractual, and regular employees. Therefore, as per Section 2(f) of the EPF Act, the definition of an ‘employee’ is an inclusive definition, and is widely worded to include “any person” engaged either directly or indirectly in connection with the work of an establishment, and is paid wages and contractual employees, are also entitled to the benefit of provident fund.
Compliance under the EPF& MP Act 1952, in respect of the employees engaged by or through Contractors [Circular No. CAIU/011(33)2015/HQ/Vol.II]
The Principal employer should ensure that the contractor is registered with EPFO before awarding a contract. After the award of the contract, the contractor details should be entered in the EPFO portal.
Payments due to the contractor should be made only after verifying that the statutory PF payments have been made to EPFO. This can be verified either directly from the EPFO portal or insisting on a payment receipt obtained by the contractor from the EPFO portal while making payment.
It is further informed that even if the contractors are having separate PF code number, the overall responsibility of ensuring the compliance under the EPF & MP Act, 1952 for the employees working through the contractors by the deposit of the dues with the EPFO regularly, rests with the Principal employer.
The principal employer can also deduct EPF dues from the contractors' bill and deposit the same either against the contractors' code number or their own code number. It is to further inform that there is a provision on the official website of EPFO under the "establishment search option to verify whether the contractors are regularly depositing Provident fund contribution in respect of their employees
