EPF Enrolment Campaign 2017 – Opportunity for NGOs to regularize EPF compliance

NGOs, whether registered as a
public charitable trust, society under the Act of 1860 or a company
u/s 8 (earlier u/s 25), are not specifically exempt from the
provisions of the Employees’ Provident Fund (EPF) Act.

Employees’ Provident Fund and
Miscellaneous Provisions Act 1952 is applicable to,
every establishment (including NGOs)
employing 20 or more persons. The responsibility to comply under the
Act lies on the employer (i.e. trustees, governing board members or
directors).

NGO Employers who have defaulted
in enrolling their employees under the EPF Act have been given a 3
month window to make good such default (i.e. prior to 31 March 2017).
They are required to file a declaration and make the payments within
15 days of filing such declaration. Whilst, the employer will need to
pay interest at 12%, they will be entitled to the following benefits:

The Enrolment Campaign 2017 has
come into effect from 1st
January 2017 and shall cease to operate on the 31 March 2017.

Every employer who has failed to
comply with the provisions of the EPF Scheme in relation to
membership of employees and contribution thereto to the provident
fund (“Fund”), is required to furnish to the Regional Provident
Fund Commissioner (“PF Commissioner”), a declaration in the
prescribed form, in respect of membership of the employees, who
were required or entitled to become members of the Fund for the
period beginning from 1 April 2009 and ending 31 December 2016
but were not enrolled as members for any reason. The employer must
specify in the declaration the date of eligibility in respect of each
employee for membership.

Within 15 days of furnishing the
declaration, the employer must remit the employer’s contribution
payable in accordance with the EPF Scheme and the employee’s
contribution deducted from the employee’s wages along with interest
(at 12% p.a.) payable in accordance with section 7Q of the Employees
Provident Funds and Miscellaneous Provisions Act, 1952 (“the EPF
Act”) and damages (at Re 1 p.a.).

The employer is not required to
pay the employee’s contribution if such amount has not been
deducted from the wages of the employee. A proviso has been added to
paragraph 30 of the EPF Scheme clarifying that the member’s
contribution 2016 is waived under the Enrolment Campaign

2017 for the period 1 April 2009
to 31 December 2016 where such contribution has not been recovered
from such member’s wages. Thereafter, the employer must file a
return in the prescribed form to the PF Commissioner.

If the employer fails to remit the
contribution, interest and damages payable by him as above, then the
declaration shall be deemed to have not been made by such employer. A
declaration made by misrepresentation or suppression of facts will be
void and be deemed to have not been made and the person making such
declaration shall be liable to penal action.

EPF Scheme has been modified to
clarify that there will be no administrative charges payable under
the Enrolment Campaign 2017 for the period 1 April 2009 to 31
December 2016.

CAP provides legal advisory to non-profits to stay compliance -complete. Should you have a query, write to us at connect@capindia.in