In recent days, Byju’s has been in the headlines for all the wrong reasons. the Bengaluru-based ed-tech startup faced flak for firing people in large numbers, and not paying its employees the provident fund for months. As per media reports, Byju’s has cleared 97% ( ₹123.1 crore) of dues after the EPFO probe into delayed PF payments. Even though Byjus has paid PF now here’s what happens if the company doesn’t pay.
What do EPFO rules say?
The EPFO guidelines mandate that for each month, employers must credit provident fund payments by the 15th of the following month in the account of employees.
What happens when an employer delays EPF contribution?
To avoid paying penalties and interest, employers must make sure Employee Provident Fund (EPF) contributions are made on time. According to a ruling made by the Supreme Court in February 2022, an employer is required to cover damages if an employee’s Employees’ Provident Fund (EPF) contribution is delayed.
“Employers defaulting on contributions are liable to pay Damages & Interest on the amount due,” said EPFO. The retirement fund body also specified the rate at which damages are covered due to delayed contributions.
0-2 months 5%
2-4 months 10%
4-6 months 15%
More than 6 months 25%
What can employees do if EPFO contribution is delayed?
“Damages are restricted up to 100 per cent of the amount in arrears. The Fund added that 12 per cent annual interest is applied on the amount due for the entire period of delay,” EPFO informed via a tweet.
Tax and investment expert Balwant Jain said that if there is any delay in payments by employers, individuals can file a complaint with the EPFO against the employer.
“An inquiry will be initiated by the EPFO against the employers,” said Jain.
EPFO can recover the damaged amount by charging interest on the late deposit as well, he added.
Amount paid by the employee and employer in EPF
An employer is liable to pay a simple interest at the rate of 12 per cent per annum, according to section 7Q of the Employee’s Provident Funds and Miscellaneous Provisions Act, 1952.
How to check whether your employer has deposited EPF contribution
-Employees can check whether their PF contributions are deposited by logging into the EPFO portal.
-EPFO also sends SMS alerts of the payment made in the PF account.
Founded by former teacher Byju Raveendran over a decade ago, Byju’s, which was once valued at $22 billion, has missed deadlines for filing its financial results and paying interest on a loan.
Source By: livemint
