New Delhi: The Narendra Modi government’s decision to “drastically reduce” the penalty charges on employers’ default in depositing EPF, EPS and EDLI contributions to EPFO, amounts to playing around with workers’ hard-earned life savings, the Centre of Indian Trade Unions (CITU said in a statement.
Strongly condemning the decision and demanding immediate withdrawal of the gazette notification, the CITU said such a decision would encourage private sector employers/owners to default on their statutory obligation.
“The recently sworn-in NDA government has wasted no time in exposing its true face. The government has allowed private corporate owners/employers to play with the workers’ contribution and their share of provident fund and pension funds. Through this, employers/owners are being encouraged to default on their statutory obligation, which includes depositing workers’ contribution, EPF, pension and EDLI funds in EPFO on time,” the CITU statement read.
Commenting on the gazette notification issued by the Union Labour Minister, CITU said it was a “very draconian gazette notification dated 14th June 2024, substantially reducing all penal charges on all employers/employers for not depositing the contributions including workers’ contribution to the Employees’ Pension Fund (EPF) and Employees’ Deposit-Linked Insurance Scheme (EDLI) on time. The extent of reduction in the penal charges has been reduced to less than one-fifth of the prescribed charges.”
It said “if an employer makes any default in payment of contribution to EPF or EDLI or delays or defaults in payment of any charges payable under the provisions of the EPF Act, 1952 or the schemes framed under this Act, the EPFO may recover the same amount from the employer by imposing penalty, damages at different rates for different periods of default.”
According to the statement till now the provision was that penal charges were calculated at 5% per annum for a default period of less than two months, 10% for a default period of two months and above but less than four months, 15% for four months and above but less than six months and 25% for six months and above.
Now, according to a new notification, “all penalty rates have been reduced to 1 per cent per annum – which means that all schemes have been reduced by 12 per cent per annum. This has been done, clearly, in the name of promoting ease of doing business at the cost of making the lives of our working people easier, who are already losing their hard-earned money.
CITU reminded the Centre that “out of about 48 crore 70 lakh 9 thousand working people entitled to EPF/pension, only about 11 crore 80 lakh working people are covered under the EPF, which highlights the pro-employer violation of the EPF Act by the enforcement machinery of the government.”
It said further, “those covered under the EPF scheme are being squeezed even more by way of promoting default by employers and thereby allowing employers to unauthorisedly siphon off the lifelong savings of workers in EPF by drastically reducing the penalties for wilful default. Defaults are increasing even against those who were brought under the Act and coverage.”
The statement further added, “Paragraph 5 of the Employees’ Pension Scheme, 1995 and Paragraph 8A of the EDLI Scheme, 1976 are the only deterrent provisions against such defaults and moreover, were the only means to ensure compliance with the Act passed by the sovereign Parliament. Now it has been almost abolished through these amendments.”
The CITU has, therefore, demanded that the Centre should immediately withdraw this “anti-worker and pro-employer” notification and called upon workers and working people to be ready for “fierce protests” across the country against these changes.
Courtesy: Newsclick