Don't Be A Defaulter, Pay Your PF Dues Now

Wishing all a very happy new year once again..!! PI Manpower wishes you joy, contentment and prosperity.

No wonder, the year 2013 has brought new hopes but it certainly is bringing a lot of surprises. One of the biggest was EPFO finding G4S guilty for not paying PF dues upto Rs 133 crore. Shocking huh?

All of us are aware of the fact that how big the organization is! G4S has operations in 125 countries with 657,000 employees, 90% of whom are employed in front-line positions servicing customers. The company, which is listed both on the London and Copenhagen stock exchanges, clocked revenues of £7.5 billion and profits of £198 million. The Indian unit accounts to 62% of the company's total Asian workforce. Its revenues have grown from Rs 213 crore in 2002-03 to nearly Rs 1,000 crore in 2009-10.

Recently, it came in the news that the Delhi Provident Fund Department has found the Indian unit of G4S guilty of not paying complete PF dues which accumulates to approximately Rs 133 crore. Sources say that if all PF state offices come to a similar conclusion, the company may be asked to compensate an amount of Rs 1,900 crore. According to an order passed by Delhi regional PF commissioner Gautam Dixit on December 18, 2012, while paying its security guards, G4S divided their salary into two elements - 50% basic pay and 50% paid as special allowances - and remitted PF dues only on the basic pay component. This allowed it to account half of the PF contributions gathered from clients.

G4S, however, stated that it has charged its clients on the basis of its wage structure and deposited the same with the PF department. It also conveyed that it’s in the process of availing the appropriate statutory right of taking legal action against the said order.

EPFO, since the last year is certainly making efforts to streamline the process of PF contributions. Firstly, making the process of filing PF Challans online was a real revolution in the last year. This effort itself made it possible to identify the loopholes and filling the same. Then, in November 2012, there came a new circular that asked companies to include several allowances into the basic wage so as to stop a number of organizations from filling less PF contributions than what is actually accrued.

This is definitely high time that the defaulters start paying their PF dues completely or else they would be charged just like G4S. Strong commitments are coming into action from EPFO and this would certainly help in collection of actual PF contributions.

Apart from the steps taken to evade defaults in PF contributions, discussions for increasing PF interest rate are also in the air. EPFO trustees who were to meet on Jan 15 for fixing the new interest rate are now likely to meet on Feb 15.

According to the sources, the preliminary estimates of EPFO indicate that the body would neither have surplus nor have deficit if it pays 8.6 per cent rate of interest to its over 50 million subscribers. However, the unionists are demanding keeping the interest rate at par or above 8.8 per cent provided to the subscribers of Public Provident Fund, which is voluntary scheme. They have also been demanding increasing the interest rate to 9.5 per cent provided by the body in 2010-11 for this fiscal. EPFO had slashed the interest rate by 1.25 per cent to 8.25 per cent for 2011-12.

We’d keep updating you about the upcoming decisions to be made by EPFO. Till then, we advise you to file your PF contributions completely. Should you need our assistance, we’re always there at your service.