The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is enacted to provide a kind of social security to the industrial workers. The security, however, differs from the security provided to them under the Workmen's Compensation Act or the Employees' State Insurance Act. The Employees' Provident Funds and Miscellaneous Provisions Act mainly provides retirement or old age benefits, such as Provident Fund, Superannuation Pension, Invalidation Pension, Family Pension and Deposit Linked Insurance.
Provision for terminal benefit of restricted nature was made in the Industrial Disputes Act, 1947, in the form of payment of retrenchment compensation. But this benefit is not available to a worker on retirement, on reaching the age of superannuation or voluntary retirement.
The Employees' Provident Funds and Miscellaneous Provisions Act is intended to provide wider terminal benefits to the industrial workers. For example, the Act provides for payment of terminal on reaching the age of superannuation, voluntary retirement and retirement due to incapacity to work. |
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| Eligibility |
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| Any person who is employed for work of an establishment or employed through contractor in or in connection with the work of an establishment. |
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| Payment of Contribution |
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* The employer shall pay the contribution payable to the EPF, EDLI and Employees' Pension Fund in respect of the member of the Employees' Pension Fund employed by him directly by or through a contractor.
* It shall be the responsibility of the principal employer to pay the contributions payable to the EPF, EDLI and Employees' Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor. |
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| Applicability |
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Establishment which is factory engaged in any industry specified in Schedule 1 and in which 20 or more persons are employed.
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Any other establishment employing 20 or more persons which Central Government may, by notification, specify in this behalf.
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Any establishment employing even less than 20 persons can be covered voluntarily under section 1(4) of the Act. |
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| Benefits |
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Employees covered enjoy a benefit of Social Security in the form of an unattachable and unwithdrawable (except in severely restricted circumstances like buying house, marriage/education, etc.) financial nest egg to which employees and employers contribute equally throughout the covered persons’ employment.
This sum is payable normally on retirement or death. Other Benefits include Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme. |
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| Rate of Contribution |
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| Scheme |
Employee's |
Employer's |
Central Govt. |
| Provident Fund Scheme |
12% |
Amount>8.33% (in case where contribution is 12% of 10%) 10% (in case of certain Establishments as per details given earlier) |
NIL |
| Insurance Scheme |
NIL |
0.5% |
NIL |
| Pension Scheme |
NIL |
8.33%(Diverted out of Provident Fund |
1.16% |
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| Damages |
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@ 17% p.a. |
- Two months and above but less than upto four months
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@ 22% p.a. |
- Four months and above but less than upto six months
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@ 27% p.a. |
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| Penal Provision |
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Liable to be arrested without warrants being a cognizable offence.
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Defaults by employer in paying contributions or inspection/administrative charges attract imprisonment upto 3 years and fines upto Rs. 10,000.00 {Section 14}
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For any retrospective application, all dues have to be paid by employer with damages upto 100% of arrears. |
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