The Employees’ Provident Fund Organisation (EPFO) has issued a stern warning to employers who fail to contribute to their employees’ Provident Fund (PF) accounts. In a tweet, the EPFO reminded employers of their legal obligation to contribute to their employees’ PF accounts every month, highlighting the penalties they face for non-compliance.
The severity of the penalties for defaulting employers depends on the duration of the missed contributions. According to the EPFO, employers who fail to contribute for less than two months will be liable to pay a penalty of 5 per cent per annum on the total contribution amount. The penalty increases to 10 per cent per annum for defaults between two and four months.
For more significant delays, employers face even steeper penalties. Employers who miss contributions for more than four months but less than six months are liable to pay a 15 per cent per annum penalty, while those exceeding six months face a 25 per cent per annum penalty. Additionally, employers are obligated to pay damages capped at 100 per cent of the outstanding amount, along with simple interest at 12 per cent 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 prioritise their employees’ social security and adhere to the regulations established by the EPFO.
