“If you feel that you do not have full money, you can file the ECR (electronic-cum-challan) and make payments later on. No damages will be imposed on you. You can also make part payment, say, 30 per cent on one day and 30 per cent on another. Installment facility will be available according to your convenience and liquidity position,” the EPFO
CEO is learnt to have told the employers.
On April 30, the EPFO
had said in a press statement that the filing of monthly ECR is separated from the payment of the statutory contribution reported in the ECR. This means that the companies need to only inform the EPFO about the number of employees for which they are going to pay for the EPF contribution without the need for making the statutory contribution towards their EPF dues.
Right now, as soon as the companies have filed their returns, known as ECR, they also have to subsequently submit the EPF payments of those many employees at one go. Not doing so attracts a penalty.
The EPFO issued a set of ‘Frequently Asked Questions’ on the move to separate ECR filing from submitting EPF contributions on Sunday in which it said payment of EPF dues can be done on a later date “as announced by the central government.” The EPFO CEO told CII executives that the move will allow firms to do “micro management of liquidity” and they can pay according to their firm’s liquidity position.
“Since filing of ECR for is now separated from payment process, the time for filing ECR for April, 2020 is on or before 15.05.2020 and dues may be remitted within the due date or within extended time, if any, as announced by the central government,” the EPFO said in the FAQ on its website.
Sources said that Barthwal acknowledged the fact that companies were facing liquidity issue and told them to help out employees in taking benefit of a scheme through which they can withdraw EPF advance to the tune of three months of their wages or up to 75 per cent of their balance, whichever is less.
The government is examining a proposal to allow more companies to take the benefit of the EPF subsidy, under the Pradha Mantri Garib Kalyan Yojana announced by the government in March. Under the scheme, only companies (with a manpower of up to 100 employees) which employ at least 90 per cent of workers below the monthly wage of Rs 15,000 a month will receive provident fund
contribution from the government for 3 months.
The industry want the cap of 90 per cent workers earning less than Rs 15,000 a month in a factory to be removed, which is leading to non-exclusion of many small firms. The EPF scheme only covers about 16 per cent of its total subscribers and about 68 per cent of the total firms that make EPF contributions for workers.
Till April 29, about 2.6 million workers making up a third of the total eligible 7.9 million workers, were able to benefit from the subsidy scheme. In terms of the number of establishments, 151,805 firms took the subsidy from the government, out of total 380,000 eligible establishments.
Barthwal gave an important clarification to employers who asked him about their PF obligations towards workers at a time when they are facing a cash crunch. The EPFO CEO pointed to an existing law which mandates companies to make a contribution on a maximum wage of Rs 15,000.
If the basic wage of an employee is above Rs 15,000, say, Rs 45,000, the employer’s obligation is to calculate the EPF amount to be deducted only on Rs 15,000. “But you need to talk to your employees (before making any changes) as it is a contract,” Barthwal is learnt to have said.
At present, 24 per cent of a worker's basic pay goes towards EPF schemes - 12 per cent as employer's share and 12 per cent as employee's.
*Employers may soon be able to pay EPF contribution in installments, instead of one-go, according to their liquidity position
*Employers needn't deduct EPF contribution above basic pay of Rs 15,000
*More employers may soon be able to get benefit of EPF subsidy scheme under the Pradhan Mantri Garib Kalyan Yojana