Employees Provident Fund

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The Employees Provident
Funds Act, 1952

Prepared by
Muradi Rajesh

 The Employees Provident Funds Act, 1952

As per Preamble to the Act, the EPF Act is enacted to provide for the institution of provident funds, pension fund and deposit lined insurance fund for employees in factories and other establishments.

The Employees Provident Funds & Miscellaneous Provisions Act is a social security legislation to provide for provident fund, family pension and insurance to employees. Employee has to pay contribution towards the fund. Employer also pays equal contribution. The employee gets a lump sum amount when he retires, which will be useful to him after retirement.

The Act covers three schemes i.e.
PF ( Provident Fund Scheme )
FPF ( Family Pension Fund Scheme )
EDLI ( Employees Deposit Linked Insurance Scheme )

The EPF Act contains basic provisions in respect of applicability, eligibility, damages, appeals, recovery etc. The three schemes formed by Central Government under the Act make provisions in respect of those schemes.

Applicability of the Act:-
The Act applies to
Every establishment which is a factory engaged in industry specified in Schedule I to the Act and in which 20 or more persons are employed. •Any other establishment or class of establishment employing 20 or more persons which may be specified by Central Government by notification in official gazette. •Central Government can also apply provisions of the Act to any establishment employs less then 20 persons [Section 1(3)]. •Even if the provisions of PF Act are not applicable in a particular establishment, if employer and majority of employees agree, the Central Provident Fund Commissioner can apply the provisions to that establishment by issuing a notification in official Gazette [Section 1(4)]. •Once the provisions of Act become applicable, it continues to be applicable even if number of employees fall below 20 [Section 1(5)].

Coverage of Act:-
The Act has been extended to
Factories, Mines other than coal mines, Hotels and restaurants, Plantation of tea, Coffee, Rubber [Tea factories in Assam have been excluded vide Para 1(3) (a) of EPF Scheme]. •Trading and commercial establishments, Engaged in purchase, Sale or storage of goods, Establishments of exporters, Importers, Advertisers, Stock exchangers, Canteens, Establishments of Attorneys, CA, ICWAs, Engineers and contractors, Architects and Medical practitioners, Hospitals, Travel agencies, Banks doing business only in one state, General insurance, Expert services, Establishments other then banks, Building and construction industry, Poultry farming, University, College or Schools. •The Act has be extended w.e.f. 1.4.2001 vide on Airline owned or controlled by Government, Establishment engaged in rendering cleaning and sweeping services. •Once an establishment is covered under PF, all its departments and branches wherever they are situated are also covered.

Other non - factory establishments covered:-
Besides factories, other establishments employing 20 or more persons can covered under the Act. Various notifications have been issued extending the provisions of PF Act to non-factory establishments. •Some major among them are – Plantation, Mines, Coffee, Hotels and restaurants, Cinema and theatres, trading and commercial establishments, Laundry, canteens, establishments of attorneys/CA/ICWA/Engineers/Architects/Medical practitioners, Hospitals, Financial establishments (Other then IFCI, UTI, IDBI, SFC), Building and construction industry, Poultry, University, College, Schools, Scientific institutions etc.

Transitory provisions when Act is extended:-
It is possible that when PF Act is extended to certain establishment, some PF scheme may be already in existence. Such scheme will continue and the balance amount in such scheme to credit of the...
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