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July 21—Disputes over employer pension plan liabilities will be more quickly resolved under guidelines released by the Employees Provident Fund Organization June 15.
The EPFO has instructed its regional offices to expeditiously conclude inquiries into cases where employers have not made provident fund contributions or claim they are not liable for contributions, where amounts due from employers are disputed or where employers have recently registered and provident fund contributions are due retrospectively. These disputes are covered under Section 7A of the Employees Provident Fund and Miscellaneous Provisions Act, which applies to all businesses employing 20 or more people.
In cases of employers recently registered that have not yet begun making contributions or of employers suspected of evasion of contributions or failure to enroll contract employees, two separate inquiries must be initiated. First, an inquiry into contributions due for the current year must be concluded within three months of the employer being issued a notice under Section 7A. A separate enquiry will determine contributions due for previous years.
Regional officers are responsible for informing employers why inquiries are being made and for ensuring that a Section 7A notice is served on the proper person and an acknowledgment received and recorded. The notice must explain the basis on which the back contributions have been calculated. Employers must be given a reasonable opportunity to contest the levy.
In a July 16 e-mail alert, consultancy EY advised employers to review the status of their Provident Fund compliance with their obligations to both international and domestic workers.
“Where required, remedial action should be taken to ensure accurate and complete compliance,” EY said, adding that employers facing Section 7A proceedings should expect early resolution and plan their next steps, whether payment or appeal to the Provident Fund Appellate Tribunal.
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An earlier EPFO circular providing guidelines for conducting Section 7A proceedings is available here.
For more information on Indian HR law and regulation, see the India primer.
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