433 companies under EPFO’s scanner for possible defaults in PF management
New Delhi: The Employees Provident Fund Organisation (EPFO) has initiated a close scrutiny of 433 companies and establishments for possible defaults in provident fund management of their employees and asked its field offices to start a quick audit on their financial health.
The 433 organizations, who run their own provident fund (PF) trusts, have been put under scanner after EPFO’s internal mechanism to track companies on PF compliance found that they have not filed PF returns of February 2018 for their employees, according to a government official and an internal circular that EPFO has issued to its field offices. They comprise nearly 15% of exempted establishments. Exempted establishments are those who run their own PF trusts under the overarching rules of EPFO.
“On a 600 point scale, at least 675 establishments have scored less than 300 points on their PF compliance rules. And of these 675, at least 433 have not filed PF returns for even February and this has raised eyebrows,” said the official cited above, requesting anonymity.
“All the field offices are directed to ensure that the up-to-date compliance audit of these establishments is conducted at the earliest…,” said the circular signed by central PF commissioner V.P. Joy.
Joy has further written that field offices should “monitor performance of exempted establishments every month” and help improve the performance of all such establishments who have scored less than 300 points on a scale of 600.
Mint could not immediately ascertain the names of these firms.
The PF commissioner has also directed his officers to take “strict action against exempted establishments showing lackadaisical approach”.
The EPFO officials can issue showcase notice, persecute establishments, or cancel their exempted status. Once an organization loses the tag, it has to provide PF deductions of its employees to the EPFO before the 15th of every month and will have no say in its investment or its interest earnings.
It also indicates that such companies may not be depositing PF deductions of its employees raising concerns about their financial health or ability to pay social security of their staff.
EPFO manages a corpus of Rs11 trillion directly or indirectly including the Rs2 trillion managed by exempted establishments.
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