Introduction to EPF & MP Act, key provisions and

objectives, Applicability of the Act, Coverage and

Voluntary coverage, Definition, roles and
responsibilities for Employees/Employers. Principal
Employer and Contractors. Industries in Schedule –I
and notified classes of establishments.
Brief overview of the Employees’ Provident Scheme
– Membership – Eligibility for membership –
Resolution of dispute regarding excluded employee
– Form 11 – Nomination and e-nomination process –
basics of exemption, default in PF payment – penal
provisions – basics of recovery actions

Presented by K. Rajagopalan
01.01.2024 RPFC- I (Retired)
 Socialist Principles - Directive Principles of State Policy

•Article 41 of the Constitution requires that the State shall, within the
limits of its economic capacity and development, make effective provision
for securing the right to work, to education and to public assistance in
cases of unemployment, old age, sickness and disablement, and in other
cases of undeserved want.

•Article 42 expands the obligations to make provision for securing just

and humane conditions of work and for maternity relief.

•Article 47 requires that the State should raise the level of nutrition and
the standard of living of its people and improve public health as among
its primary duties. These, thus, are the basic frameworks of Social
Security provisioning for the citizenry in the country.
 Statement of Objects and Reasons inter alia states that-

The question of making some provision for the future of the industrial
worker after he retires, or for his dependants in case of his early death,
has been under consideration for some years. The ideal way would have
been provisions through old age and survivors’ pensions as has been
done in the industrially advanced countries. But in the prevailing
conditions in India, the institution of a pension scheme cannot be
visualised in the near future. Another alternative may be for provision of
gratuities after a prescribed period of service. The main defect of a
gratuity scheme, however, is that the amount paid to a worker or his
dependants would be small, as the worker would not himself be making
any contribution to the fund. Taking into account the various difficulties,
financial and administrative, the most appropriate course appears to be
the institution compulsorily of contributory provident funds in which both
the worker and the employer would contribute. Apart from other
advantages, there is the obvious one of cultivating among the workers a
spirit of saving something regularly. The institution of a provident fund of
this type would also encourage the stabilisation of a steady labour force
in industrial centres.
• The E.P.F.and M.P.Act, 1952 consists of :
• The Employees’ Provident Funds Scheme, 1952

• The Employees’ Pension Scheme, 1995

• The Employees’ Deposit-Linked Insurance, Scheme, 1976

• It extends to the whole of India. The Act was extended to the State of
Jammu and Kashmir w.e.f. 1.1.2020 vide notification No.S.O.3962(E) dated
31.10.2019
[ Some important Sections of the Act are explained below :- ]
• Sec.1(3)a - Coverages – Factories as specified in Schedule I – definition of
factories is contained in Sec.2(g)
• Sec.1(3)b - Coverages – Establishments – which the Central Government
by notification in the official Gazette, specify in this behalf
• The provisions of the EPF Scheme shall not apply to the Tea factories in
the State of Assam
• Sec.1(4) - Voluntary Coverage
• Sec.1(5) - An establishment to which this Act applies shall continue to
be governed by this Act not withstanding that the number of persons
employed therein at any time falls below 20
 Sec.2A - Establishments to include all departments and branches
 Sec.2(f) - Definition of an employee
 Sec.3 - Power to apply Act to an establishment which has a
common Provident Fund with another establishment
 Sec.5A - Central Board
 Sec.5AA - Executive Committee
 Sec.5B - State Board
 Sec.6 - Contributions - 12 % / 10 % ( less than 20 ees’ and etc. )
- Earlier it was 6.1/4% - 8.1/3% - 10% - 12%

 Sec.6A - E.P.S.,1995
 Sec.6C - E.D.L.I.,1976
 Sec.7A - Determination of moneys due from employers
 decide the dispute in regard to applicability of the Act
 default management
 Sec.7Q - Imposing of simple interest at the rate of 12% p.a.
 Sec.8A - Recovery monies of by employer and contractors
 Sec.8B - Mode of recovery of moneys due from employers
 Attachment and Sale of movable and immovable property
 Arrest of the employer
 Appointment of receiver
 Sec.8F - Attachment of bank account / sundry debtors
 Sec.10 - Protection against attachment
 Sec.11 - Priority of payment of PF dues over other debts
 Sec.14 - Penalties
 Minimum one year imprisonment and a fine of Rs.10,000
for default in payment of employee’s share
 6 months imprisonment and Rs.5000 in any other case.
 Sec.14B - Power to recover damages – for late remittances
 Sec.16 - Act not to apply to certain establishments
(1) (a) Any establishment registered under the Co-operative
societies Act,1912 – less than 50 employees - without
the aid of power.
(b) Establishments belonging to or under the control of
the C.G. or a S.G. are entitled to the benefits.
(c) Establishment set up under Central, Provincial/State
Act are entitled to the benefits.
(2) Financial position of any class of establishments.
 Sec.17 - Power to exempt
 Sec.18 - Protection of action taken in good faith
 Employees’ Provident Funds Scheme, 1952
[ Some important Scheme provisions are explained below :- ]
Para 2(f) - Excluded employee –
 Withdrew full amount under clause (a) or (c)
of sub-paragraph (1) of paragraph 69
 Pay exceeds Rs.15,000 p.m.(w.e.f.1.9.2014)
 An apprentice
Para 4 - Regional Committee
Para 26 - Membership – from day one(from 1.11.1990)
[Earlier it was 240 days-120 days-60 days]
Para 26-B - Resolution of doubt regarding membership.
Para 29 - Contributions – 12/10 %
Para 30 - Payment of contribution payable by himself /
contractors – within 15 days
Para 36 - Duties of employers – submission of returns – Form-
5/10 within 15 days (through ECR w.e.f.1.4.2012)
Para 38 - Mode of payment of contributions (through ECR)
 Through internet banking within 15 days
 Submission of F/12A within 25 days (through ECR)
 Para 39 - Fixation of Administrative Charges - 1.10 %

 Para 43 - Submission of F /3A and F/6A - within one month

of the close of the financial year (taken care of through ECR on
monthly basis)

 Para 61 - Nomination

 Para 62 to
para 68 NN - Withdrawals/non-refundable advances - F/31

 Para 69 - Settlement of claims - F/ 19

 Para 70 - Accumulations of a deceased member to whom

payable as per nomination or as per L.H.C.- F/20

 Para 73 - Issue of annual statement of accounts – by

September of every year.(e-pass book from 1.4.2012)
 Para-80 Special provisions in the case of
newspaper establishments and newspaper
employees

 there is no pay ceiling for eligibility;

 three months continuous service or has actually worked

for not less than 60 days during a period of 3 months or
less in that newspaper establishment or in other such
establishment under the same employer or partly in one
and partly in the other or has been declared permanent in
any such newspaper establishment, whichever is the
earliest

 all employees including working journalists employed to

do any work in or in relation to any newspaper
establishment.
 Para 81- Special provisions in the case of Cine-
Workers
 The Cine-Workers does not include employees
employed in Cinema theatres including Preview
theatres, Film Studios, Distribution concerns dealing
with exposed film, Film Processing Laboratory;

 Cine worker means an individual who is employed,

directly or through any contractor or other person, in or in
connection with the production of a feature film to work as an
artiste (including actor, musician or dancer) or to any work,
skilled, unskilled, manual, supervisory, technical, artistic or
otherwise;

 Cine worker is eligible for P.F. membership, if he has worked in

not less than 3 feature films with one or more producers,
provided his wages does not exceed Rs.1600 p.m. or where
such remuneration is by way of lump sum, it does not exceed
Rs.15,000 per annum.
 Para-82 Special provisions in respect of certain
employees
 The Scheme shall (effective from 1.4.2008) in its application to
an employee who is a person with disability under the Persons
with Disabilities Act, 1995 and under the National Trust for
Welfare of Persons with Autism, Cerebral Palsy, Mental
Retardation and Multiple Disabilities Act, 1999 respectively, be
subject to the following modifications, namely:-
 In para 2 (f), the following changes has been made in respect of
pay ceiling :- the pay at the time he is otherwise entitled to
become a member of the Fund, exceeds Rs.25,000 per month
 In para 30, the following proviso shall be inserted, namely:-
“Provided that the Central Government shall contribute the
employer’s share of contribution upto a maximum period of
three years from the date of commencement of membership of
the Fund, in respect of an employee who is a person with
disability, employed directly by the principal employer or
through a contractor
 Not applicable in case of International Workers
 Para-83-International Worker
Coverage and Compliance

Who will become member of the Fund?

 Every IW, other than an 'excluded employee'-employed as
on 1.10.2008 from 1st November, 2008 and employed after
1.10.2008 from the date of his joining the establishment
 Every excluded employee - from the date he ceases to
be excluded employee

Contribution –
Employees’ Provident Fund -on full pay from 01.10.2008
Employees’ Pension Fund – on full pay from 11.09.2010
 Excluded Employee
Excluded employee is a foreigner, who is -
posted in an establishment in India with COC;
COC to be issued by concerned RPFC (w.e.f.15.8.2013)
Rs.10,000 to be charged for issue of COC to employees of other
Social Security Providers like Seamen’s P.F., Banks etc. (EPFO
designated as Liaison Agency)
contributing to the social security programme of his home country
and exempted from the provisions of the Indian social security in
terms of a Social Security Agreement or a bilateral agreement (e.g.
CECA) signed with India-(containing a clause on social security prior
to 1.10.2008, which exempts natural persons of either country to
contribute to the social security fund of the host country)
 CECA –Comprehensive Economic Cooperation Agreement-(e.g.
para 4 of Article 9.3 of CECA between India and Singapore provides
that “Natural persons of either Party who are granted temporary entry
into the territory of the other Party shall not be required to make
contributions to social security funds in the host country”)
 Addressing Social Security Concerns through SSA
Issues Provisions in SSA
i. Avoiding double (i) Detachment - Indian employees working in
coverage countries with which India has Social Security
Agreements are exempted from contributing to
their Social Security System, provided they are
complying with the Indian Social Security
System. This exemption is available for a
specified period stipulated in the agreement
(ii) Totalisation - The period of service rendered
ii. Counting of service
in another country is counted for determining
rendered in other
eligibility for pension. The actual pensionary
country
benefits, however, are payable for the period of
contributory service on pro-rata basis
(iii) Portability - Pension benefits
iii. Bringing benefits are payable without reduction, direct to the
back home beneficiaries choosing to reside in the home
country or in any other country
 Overview of benefits under SSAs-(I)
Sl.No. Country Detachment Totalisation Portability

1 Belgium (1.9.2009) 5 years √ √

2 Germany (1.10.2009) 4 years ⤫ ⤫

3 Switzerland (29.1.2011) 6 years ⤫ √

5 years (for
Indians)
4 Denmark (1.5.2011) √ √
3 years (for
Danish)
5 Luxembourg (1.6.2011) 5 years √ √
6 France (1.7.2011) 5 years √ √

7 South Korea (1.11.2011) 5 years √ √

8 Netherlands (1.12.2011) 5 years ⤫ √

 Overview of benefits under SSAs-(II)
Sl.No. Country Detachment Totalisation Portability

9 Hungary (1.4.2013) 5 years √ √

10 Rep of Finland (1.8.2014) 5 years √ √

Kingdom Of Sweden
11 2 years √ √
(1.8.2014)
12 Czech Republic (1.9.2014) 5 years √ √

13 Kingdom of Norway (1.1.2015) 5 years √ √

14 Republic of Austria (1.7.2015) 5 years √ √

15 Republic of Canada (1.8.2015) 5 years √ √

Republic of Australia
16 5 years √ √
(1.1.2016)
 Overview of benefits under SSAs-(II)
Sl.No. Country Detachment Totalisation Portability

Republic of Japan
17 5 years √ √
(1.10.2016)
Portuguese Republic
18 5 years √ √
(8.5.2017)
 Comparative Benefits
Persons covered under SSA
 Foreign IWs are exempted from
making social security
contribution in India on the basis
of Certificate of Coverage issued
by the designated agency.
 withdrawal of PF accumulation
on ceasing to be employed in an
establishment covered under the
Act (amendment dt.5.10.2012)
 “withdrawal benefit” under EPS,
1995
 Totalization benefits if provided
in SSA
 Pension portable abroad if
provided in SSA
Persons NOT covered under SSA
 Foreign IWs are not exempted
from making social security
contribution in India and
mandatorily need to be
enrolled as member of EPF
 withdrawal of PF accumulation
not before the age of 58 yrs or
on retirement on account of
permanent and total incapacity
for work due to bodily or
mental infirmity
 No “withdrawal benefit” under
EPS, 1995
 No totalisation
 Pension payable in India only
18
 Definition of Family - Para 2(g)
 ‘Family’ means –

 In the case of a male member, his wife, his children, whether

married or unmarried, his dependant parents and his deceased
son’s widow and children

 If the male member proves that his wife has ceased, under the
personal law governing him or the customary law of the
community to which the spouses belong, to be entitled to
maintenance she shall no longer be deemed to be a part of the
member’s family for the purpose of this Scheme, unless the
member subsequently intimates by express notice in writing to
the Commissioner that she shall continue to be so regarded

 In the case of a female member, her husband, her children,

whether married or unmarried, her dependant parents, her
husband’s dependant parents, her deceased son’s widow and
children
 If a female member by notice in writing to the Commissioner
expresses her desire to exclude her husband from the family, the
husband and his dependant parents shall no longer be deemed to
be a part of the member’s family for the purpose of this Scheme,
unless the member subsequently cancels in writing any such
notice
 Adoption of the child of a member or child of a deceased son of a
member by another person legally, such child is excluded from
the family

Definition of Family – Para 2(vii) of EPS 1995

‘Family means –
 wife in the case of male member of the Employees’ Pension Fund
 husband in the case of a female member of the Employees’
Pension Fund
 Sons and daughters of a member of the Employees’ Pension Fund
( including children legally adopted by the member)
 Nomination-Para 61- for P.F., Para 23 for EDLI and Para 18 for
EPS’95
 Each member shall make in his declaration under Part A of
Form-2(R), a nomination conferring the right to receive the
amount(including the assurance amount under EDLI) that may
stand to his credit in the Fund in the event of his death before
the amount standing to his credit has become payable, or where
the amount has become payable, before payment has been
made
 A member may in his nomination distribute the amount that may
stand to his credit in the Fund amongst his nominees at his own
discretion
 If a member has a family at the time of making a nomination, the
nomination shall be in favour of one or more persons belonging
to his family. Any nomination made by such member in favour of
a person not belonging to his family shall be invalid
 After marriage a fresh nomination is to be given. The earlier
nomination shall be deemed to be invalid
 If at the time of making a nomination the member has no family,
the nomination may be in favour of any person or persons (even
an institution) but if the member subsequently acquires a family,
such nomination shall forthwith be deemed to be invalid and the
member shall make a fresh nomination in favour of one or more
persons belonging to his family

 In the case of nomination under EPS 1995, the same has to be

made under Part B of Form 2 (R)

 Nomination should be submitted in Form-2, which is available

online through member portal.

 The process to be followed for the filing of e-nomination through

online is attached :-
 How to file e-Nomination through Online

•On becoming a member of EPF/EPS, it is mandatory for the members to

nominate their nominees conferring the right to receive the PF amount that
stands to their credit and the Pension benefits in the event of death. In order
to facilitate the filing of nomination instead of submission of Form 2(physical)
the members can file their nomination through online for which EPFO has
launched one more e-initiative i.e., Aadhaar based e- nomination.

• The steps to be followed by the EPF/EPS members to furnish their

nominees details through online:

1. Member’s mobile number should be linked with his Aadhaar.

2. Log on to EPFO's website, unifiedportal-mem.epfindia.gov.in and

enter your UAN (Universal Account Number) and password to login.

3. Click on “View” tab and then click on “Profile” option to upload your
photo (less than 100 kb) in jpg/jpeg format and update the required
details including permanent/current address.
4. Then go to click on "Manage" tab and then click on “E-nomination” option.

5. Details like UAN, Name, Date of birth, Gender, Father’s/Husband’s Name,

Marital Status, Permanent/Current Address, Date of Joining in EPF and Date
of Joining in EPS appear on the screen. On verification of the said details,
click “Proceed” option.

6. Now, click on "yes" to update family declaration. Subscribers can nominate

more than one nominee and also distribute the amount in
percentage that may stand to his credit in the Fund amongst his/her
nominees at his/her own discretion.

7. Go to "add family details" and add the details of people you want to nominate.
You need to enter the Aadhaar Number, Name & date of birth as per Aadhaar,
Relationship, Address of the nominee, Bank account details and upload the photo
of the nominee, then click “Save family details.” If the nominee is a minor, please
furnish the details of the Guardian i.e., name of the guardian, relationship and
address. You can also add more than one nominee by clicking on "Add Row".
08 Go to "nomination details" and declare the total amount of share in
percentage (%) among your nominees. In case, you would like to
nominate only one person as your nominee then you can
declare 100% as share.

09 Click on "save EPF nomination" box.

10 Now, click on e-sign button and enter your Aadhaar number or virtual
id of Aadhaar to generate OTP, which will be sent to the registered
mobile number, which is linked to your Aadhaar card.

11 The Aadhaar e-sign facility helps in approving the e-nomination form.

Enter the OTP (one-time password).

12. After this the e-nomination gets registered with the EPFO. A readily
available nomination in the system enables to easily file the
Pension Claim and in the event of the demise to the member his/her
nominee will be able to file online claim based on the OTP on his/her
Aadhaar Linked Mobile. One doesn't need to apply any physical
document to the employer or ex-employer after the online nomination is
done.
 Eligible Nominees in EPF/EDLI & EPS
Nominees are very important in all Savings & Insurance Schemes. In EPFO
also, nominees are very important to get their share of PF accumulations/EDLI
and the Pension benefits in case of any calamity i.e., after the death of
Member.

There are two types of Nominees for EPF/EDLI and Pension Schemes based
on member’s marital status.
If the member is a Bachelor or Spinster having Family :

GENDER EPF / EDLI SCHEME EPS SCHEME

MALE or Dependent Parents (or) any one of the family Dependent
FEMALE members Parents (or) any
(Nomination can be made for one or more one of the family
persons belonging to his family duly members
mentioning the Percentage of Share)
If the member is a Bachelor or Spinster and no Family

GENDER EPF / EDLI SCHEME EPS SCHEME

MALE or FEMALE Any person or persons

(Nomination can be made for one Any person

or more persons duly mentioning
the Percentage of Share)
If the member is a married Person:

GENDER EPF / EDLI SCHEME EPS SCHEME

-his Wife

MALE -his Children (whether married or His Wife, sons and daughters
unmarried)
(including legally adopted
-his dependent parents children)

-his deceased son’s widow and children

-her husband

FEMALE -her children (whether married or Her Husband, sons and

unmarried) daughters

-her dependent parents (including legally adopted

children)
-her husband’s dependent parents

-her deceased son’s widow and children

(Nomination can be made for one or more

persons belonging to his family duly
mentioning the Percentage of Share)
•If a member has a family at the time of making a Nomination, the nomination
shall be in favour of one or more persons belonging to his family for
EPF/EDLI Schemes and any nomination made by such member in favour of a
person not belonging to his family shall be invalid.

•A fresh nomination shall be made by the member on his marriage and any
nomination made before such marriage shall be deemed to be invalid.

•At the time of making a nomination, if the member has no family, the
nomination may be in favour of any person or persons but if the member
subsequently acquires a family, such nomination shall forthwith be deemed
to be INVALID and the member shall make a fresh nomination.

•“Members may nominate their nominees any number of times through e-

Nomination in member portal and the latest nomination will be valid”