Alternatively referred to as the Employees’ Provident Fund, EPF is a retirement benefits scheme that employees and employers contribute to for the employee’s financial security. The fund is paid to the retiree with interest earned over the years.
It is the Employees’ Provident Fund or EPF, which is governed and managed under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. It is run by the Employees’ Provident Fund Organization (EPFO), a statutory body that falls under the Ministry of Finance and Labor. In general, the EPF scheme requires a percent of an employee’s salary as a contribution, but the employer must also make an equivalent contribution towards it. In addition, the employee receives a lump sum amount at the time of retirement, equal to the aggregate of his and the employer’s contributions and interest accrued.
There are Three Primary Types of Provident Funds:
- The Public Provident Fund Act, 1968, covers all contributors regardless of employment status;
- The Statutory Provident Fund (SPF) is the pension fund for Government employees.
- Organizations with 20 or more employees are recognized as employer-provident funds.
You cannot restrict the EPF scheme to a particular employer, so even if you switch jobs, you can transfer your EPF scheme from one employer to another. A portion of every private-sector employee’s salary is deposited into a retirement plan every month through this plan. In this scheme, the employee is required to deposit a certain amount into the Employee Provident Fund Organization (EPFO). It is a trust that invests the funds deposited by workers into the Provident Fund jointly.
The EPF primarily covers Three Schemes:
- The Employees’ Pension Scheme replaced the Employees’ Family Pension Scheme in 1995;
- A 1952 Act providing a set of benefits to employees, as well as miscellaneous provisions;
- EDLLS, Employees’ Deposit Linked Insurance Scheme.
Registration / Applicability of EPF:
The EPF scheme applies to factories engaged in any of the industries listed in the schedule.
- Employing 20 people or more;
- It includes all establishments that may be notified by the Central Government in its official gazette;
- This includes any establishment with 20 or more employees. According to Mangalore Gandhi Beedi Workers v. Union of India, it also covers home workers.
As a result, there is a two-fold test:
- Are there any qualifiers to call the establishment “a factory”?
- Are there more than 20 people employed in the aforementioned business?
The EPF does not apply to:
- It is not possible for casual or temporary workers to qualify as employees. Bikaner Cold Storage Company Ltd. v. Regional Provident Fund Commissioner, Rajasthan, upheld this in their case.
- Co-operative society establishments are registered under the Co-operative Society Act, 1912.
- In relation to the State, any cooperative society that employs 50 or fewer people after five years, provided they don’t use power.
- In addition, the Central Government is able to exempt any class of establishment from the EPF Rules and Scheme based on their financial situation.
Know more about: How to apply for Pf?
Employee EPF Registration Documents
A list of the required documents for EPF registration can be found here
- An official birth certificate;
- Letter of intent to join;
- Documentation of Address;
- A card bearing PAN;
- The salary receipt showing the grade and salary;
- Proof of designation must be provided;
- In this case, the IFSC code is the account number;