The Employees' Provident Fund Organisation (EPFO)
vide its circular dated 8 January 2016 (Circular) has removed the grace period
available to employers (in terms of the Manual of Accounting
Procedure (Part – I General)), for payment of dues
under the Employees' Provident Funds and Miscellaneous
Provisions Act, 1952 (EPF Act) and the Employees' Provident
Fund Scheme, 1952 (EPF Scheme), Employees' Pension Scheme, 1995
(EPS Scheme) and the Employees' Deposit Linked Insurance
Scheme, 1976 (EDLI Scheme) (collectively, the Schemes) with effect
from February 2016.
Paragraphs 38(1) of EPF Scheme, 3 of the EPS Scheme and 8(1) of
the EDLI Scheme specify a time limit of 15 days from the close of
every month for the employer to make payments towards contributions
to the provident fund, pension fund and insurance fund,
respectively. However, through Paragraph 5.1.3 of the Manual of
Accounting Procedure (Part – I General) as applicable to the
Schemes, the EPFO granted a grace period of 5 days to employers in
addition to the available 15 days for making payments under the
Schemes prior to applicability of penal provisions in terms of the
EPF Act for delay on part of the employer.
Details of changes and analysis
The circular has changed the time period available to the
employers to make payments under the Schemes as follows:
Change in the time limit
By issuing the Circular, the EPFO has removed the grace period
of 5 days available to the employer to make payments, and
accordingly, all payments and other dues contemplated under the EPF
Act and the Schemes are to be made within the prescribed period of
15 days only.
This Circular is made applicable from February
2016 with respect to payment by the employer towards all
payments due in terms of the EPF Act and the Schemes arising in the
month of January 2016 and payable in the month of February
While the Circular is in line with the recent developments in
aligning the labour laws with the all-round developments, it will
be helpful in curtailing the delay in making payments towards the
Schemes by employers.
- Khaitan & Co | Employment Labour & Benefits
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On 31 December 2015 the President gave his assent to certain amendments to the Payment of Bonus Act, 1965. The amendments have increased the wage threshold for determining applicability of the Act from INR 10,000 to INR 21,000 per month.
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