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Covid-19 impact: Companies facing cash crunch can delay EPF contribution

The EPFO said that companies are facing liquidity or cash crunch in paying their mandatory provident fund dues "even though they are retaining the employees on their rolls"

Topics
EPFO | Employees Provident Fund | Coronavirus

Somesh Jha  |  New Delhi 

EPFO, PF, Provident fund, savings
At present, firms are required to submit return to the EPF by the 15th of the subsequent month.

Companies can delay the contribution made by them towards the employees’ provident fund schemes of workers, the Employees’ Provident Fund Organisation (EPFO) said on Thursday, in a bid to give relief to industries impacted by the national

In a statement issued on Thursday, the said that companies are facing a liquidity or cash crunch in paying their mandatory provident fund dues “even though they are retaining the employees on their rolls” due to the spread of COVID-19 pandemic.

“Keeping in view the above situation and to further ease the compliance procedures…the filing of monthly electronic-challan-cum-return (ECR) is separated from the payment of the statutory contribution reported in the ECR,” the said in a statement.

This means that the companies need to only inform the 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.

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At present, firms are required to submit return to the EPF by the 15th of the subsequent month along with the need to make their contributions on time within one or two days.

“The contribution may by paid later by the employer after filing the ECR,” the EPFO said. A delay in contribution towards a worker’s EPF savings will not attract penalty, the EPFO added.

“Filing of ECR by the employer in time is indicative of employer’s intent to comply,” the EPFO said. It added that the government is contemplating “further relief to the businesses” affected “adversely” by the pandemic and this move will allow the authorities in taking a policy decision.

At present, 24 per cent of a worker's wage is deducted towards the EPF schemes – 12 per cent counted as employee’s share and the remaining 12 per cent as the employer’s share. Companies hiring at least 20 workers are required to make a contribution towards the EPF schemes.


First Published: Fri, May 01 2020. 09:07 IST
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