Coronavirus impact | Companies may be allowed to make EPF payments in instalments: Report

The government may ease mandates for employees’ provident fund (EPF) contributions and allow more companies to benefit from the Pradhan Mantri Garib Kalyan Yojana (PMGKY) amid the coronavirus pandemic and ongoing economic slump.

Sunil Barthwal, the CEO of the EPFO, has said that employers can now file the electronic-cum-challan (ECR) to make partial payments in instalments, with no damages (penalties) imposed, the Business Standard reported.

The idea is to allow companies to cut wage bills while giving employees more in-hand, it added.

“If you feel that you do not have full money … you can also make part payment, say, 30 percent on one day and 30 percent on another. Instalment facility will be available according to your convenience and liquidity position,” he said, according to sources speaking to the paper.

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Barthwal made the clarifications at the Confederation of Indian Industry (CII) meet on April 30, it added.

Moneycontrol could not independently verify the report.

This is in line with FAQs posted by the EPFO that monthly ECR is now separated from statutory contributions, i.e. companies can submit the number of employees without making mandated contributions and will not bear penalties for this. “Payment of EPF dues can be done on a later date as announced by the central government,” it said.

Meanwhile, eligibility requirements for the EPF subsidy scheme under the PMGKY may also be broadened to include more companies. Currently, the scheme allows subsidy benefits for companies with up to 100 employees where 90 percent workers earn below Rs 15,000 per month.

In such cases, the government will provide PF contributions of both parties for up to three months. The industry is pushing for the requirement of 90 percent workers earning Rs 15,000 per month to be removed.

Companies may be allowed to deduct only on basic pay of up to Rs 15,000 towards employees’ provident fund (EPF) contribution, provided wage contracts are renegotiated, Barthwal said as per the report.

He clarified that existing law mandates a contribution on a maximum wage of Rs 15,000. But if basic wage is above Rs 15,000 “you need to talk to your employees (before making any changes) as it is a contract,” he added.