Employees Provident Funds Act, 1952 Essay

all(prenominal) introduction registered under Cooperative Societies map or State faithfulness relating to cooperative societies, employing less than 50 persons and snuff iting without stipendiary of power To every establishment belonging to or under Control of Central regime or a State Government and whose employees are entitled to pull in of contributory long ancestry or old age premium. To whatsoever establishment set up under any(prenominal) Central or State Act and whose employees are entitled to benefit of contributory provident shop or old age pension. Administration of the fund section 5(1A). both(prenominal) employer and employee have to lucre theatrical role at prescribed rates.These quantitys are attribute to a fund. The fund vests in and is administered by Central Board. Employees Covered chthonic the scheme As per section 2(f), employee means any person who is occupied for stipend in any kind of elaborate, manual or otherwise, in or in connection with the work of an establishment, and who gets his wages directly or indirectly from the employer. Thus, Persons utilise through contr portrayalor in connection with work of establishment are cover Apprentices employed under Apprentices Act or under standing orders of establishment are disqualified, i. . they are non employees. The clay sculpture standing orders merely state that an apprentice is a learner who is paid an allowance during the period of his training. Non-eligible Employees Under PF Employee whose feed is more than Rs. 6,500 per month are not eligible. Apprentices as per certified standing orders or under Apprentices Act Casual employees. However, employees employed through contractors have also to be covered under PF. Employee to Become member of descent Immediately on connectiveEvery employee employed in or in connection with work of a factory or establishment to which the Act applies is entitled and needed to become member of Provident origin, unless he is an disqualified employee. Contribution by Employer & Employee As per section 2(c) character means a role collectible in discover of a member under a project or the office collectable in respect of an employee to whom the Insurance purpose applies. As per section 6, portion shall be paid by employer 12% of basal wages overconfident DA dearness allowance increase retaining allowance.This sum center is defined as pay. Employees Provident Fund system This is the main scheme under the Act. Both employer and employee have to pay contribution to Provident Fund. The employer has to deduct contribution of employee from the stipend of employee and has to pay both employees contribution as well as employers contribution by a challan in prescribed form. The amount has to be paid in clear bank. EMPLOYEE CAN PAY HIGHER CONTRIBUTION Employee has to contribute 12% of his pay as contribution. The employee can voluntarily pay higher contribution supra the statutory rate.However, employer does not have to match the voluntary contribution, over and higher up the statutory rate. Contribution Payable under PF scheme The Principal Employer is conceivable to pay contribution of his own employees as well as employees employed through contractor. Principal Employer can recover from contractor the amount paid by him on behalf of contractor. The contribution is 12% of pay i. e. basic wages, plus dearness allowance, cash value of food concession and retaining allowance. Contribution of both employer and employee is same i. e. 12% each. Employer has to pay his contribution to EPF.He cannot deduct his contribution from wages of the employee. However, he has to deduct employees mete out from his salary and pay the same in EPF scheme. This deduction can be only from the wages pertaining to period for which contribution is paid. However, if there is accidental omission, the amount can be recovered later. Amount deducted from salary of employees is held in trust by the e mployer or contractor. The fit allow be retained in the EPF scheme. Thus, on retirement, the employee will get his full share plus the balance of Employers share retained to his credit in EPF account.Lower Contribution in trustworthy cases The employers and employees contribution is 12% each. This is applicable to many of industries and establishments. However, this contribution is not applicable to any establishment employing less than 20 persons any establishment registered with Board for Industrial and Financial Reconstruction (BIFR) as a sick company the lower rate of contribution continues till its clams worth is positive * any other establishment which has accumulated hurt equal to or more than its assets and has also suffered cash loss in last two long time.Jute industry , Beedi industry ,Brick industry other than the rotate sector. In these cases, the contribution is 10%. Transfer of accounts (1) Where an employee employed in an establishment to which this Act applie s leaves his employment and obtains re-employment in another establishment to which this Act does not apply the amount of accumulations to the credit of such employee in the Fund or as the case may be in the provident fund of the establishment go forth by him shall be transferred within such age as may be specified by the Central Government. enthronization The amount received by way of provident fund contribution is invested by the board of trustees in accordance with the investment pattern authorise by the government of India. The members of the provident fund get interest on the m whizy in their provident fund accounts. The rate of interest for each financial year is recommended by the board of trustees and is subject to final stopping point by the government of India. 2) Where an employee employed in an establishment to which this Act does not apply leaves his establishment and obtains re-employment in another establishment to which this Act applies the amount of accumulatio ns to the credit of such employee in the provident fund of the establishment left by him may if the employee so desires and the rules in relation to such provident fund permit be transferred to the credit of his account in the Fund The Employees Pension Scheme, 1995 Applicability EPS, 1995 applies with effect from 16. 11. 995 to all establishments to which EPF,1952 and 1971 were applicable. Eligibility Employers and employees contribution security department of provident fund Pensionable salary Pensionable service reflection for calculation of pension Monthly members pension = Pensionable salary * pensionable service 70 Employees family pension scheme For the purpose of providing family pension and breeding restitution benefits to the employees of any establishment or class of establishment to which the act applies. the scheme is applicable to all subscribers of employers provident fund. ContributionThe employees contribution of 8. 33% will be diverted to the fund of pension sch eme. Employers contribution is 12%. In such cases, 8. 33% is diverted to pension scheme and balance 1. 67/3. 67% as the case may be, will be in credit of employees name in provident fund account. family pension fund from and out of provident fund contributions payable by the employer and employee in each month, a part of the contribution representing one and one and 1/6 the percent from and out of employees contribution is remitted by the employer to the family pension fund. Benefits under the schemeMembers will get pension on retirement check or retirement from service and upon disablement during employment. Family pension will be available to widow/widower for life or till he/she remarries. In addition, children will be entitled to pension, up to 25 years of their age. Employees Deposit Linked Insurance Scheme The Central Government may by notification in the Official Gazette frame a Scheme to be called the Employees Deposit-linked Insurance Scheme for the purpose of providing li fe insurance benefits to the employees of any establishment or class of establishments to which this Act applies.Deposit-linked Insurance Fund into which shall be paid by the employer from time to time in respect of every such employee in relation to whom he is the employer such amount not being more than one per cent of the aggregate of the basic wages dearness allowance and retaining allowance (if any) for the time being payable in relation to such employee. The employer has to pay contribution equal to 0. 50% of the total wages of employee, in addition to administrative charges of 0. 1% of total wages. The employee need not contribute any amount too the scheme. The salary limit for coverage of employees in same as that of provident fund.