The employer must deposit the amount deducted towards Employees Provident Fund in the employee’s PF account every month.
Based on the existing Employees’ Provident Fund Organisation (EPFO) rules, the employee and the employer contribute 12 per cent of the basic salary and dearness allowance (basic salary+DA) every month to the PF account.
Out of the employer’s share, 8.33 per cent goes towards the Employees Pension Scheme (EPS), and the remaining 3.67 per cent is deposited into the PF account.
The EPFO regularly updates the subscribers about the monthly deposits into their PF accounts through SMS alerts.
Employees can also check the deposits made into the PF account every month by logging in to the EPFO portal.
The employer must deposit the monthly deductions made towards EPF in the PF account of the employee.
The employer should deposit the EPF contribution within 15 days of the salary paid for the last month.
However, many employers fail to deposit the PF amount at times.
In such cases, the employees can take several steps to deduct the amount from their salary towards PF contribution.
The employees can file a complaint with the EPFO against the employer for a non-deposit of the PF contribution.
After a complaint is filed, the retirement fund regulatory body inquires against the employer. It will attract legal action if it is found during the inquiry that the EPF amount was deducted but not deposited.
EPFO authorities can also levy interest for the late deposit of the EPF deductions and initiate recovery actions.
Under the EPF Act, non-deposit of the amount deducted towards the provident fund would attract a penalty. EPFO also can file a police complaint against the employer under Sections 406 and 409 of the Indian Penal Code (IPC) for criminal breach of trust.
EPFO is empowered under 14-B of Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, to recover the damages where an employer defaults in paying any contribution to the PF account.
Before initiating penal action, the EPFO will give the employer a reasonable opportunity of being heard.
According to the existing tax rules, employers can’t claim tax relief for EPF contributions if they fail to make timely deposits into the PF account.