The Employees’ Provident Fund Organisation (EPFO) on Friday announced major relief to the companies stating that no penalty will be levied upon them for penalty for delayed deposit of dues during lockdown.

The move is aimed to ease the compliance norms for 6.5 lakhs EPF covered establishments and save them from liability on account of penal damages.

“Due to prolonged lockdown announced by the Govt. to control the spread of COVID-19 and other disruptions due to pandemic, establishments covered under EPF & MP Act, 1952 are distressed and unable to function normally and pay the statutory contributions in time,” an official release said.

Considering the difficulty faced by the establishments in timely deposit of contributions or administrative charges due for any period during lockdown, the EPFO has decided that such delays due to operational or economic reasons shall not be treated as default and penal damages should not be levied for such delay.

EPFO said that a circular regarding this has been issued to Field Offices of EPFO containing instructions to the effect that no proceeding shall be initiated for levy of penal damages in such cases which is available under TAB “COVID-19” on home page of EPFO website.

It may be recalled that Finance Minister Nirmala Sitharaman on Wednesday (May 13) announcing the first tranche of the Rs 20 lakh crore Atmanirbhar Bharat Package had said that that for the next three months employee provident fund (EPF) contribution will be 10 per cent each for employees and employers as compared to the statutory obligation of 12 per cent. The move is to increase take-home salary for employees and to give relief to employers in payment of provident fund.

The government has decided to continue EPF support for business and workers for 3 more months providing a liquidity relief of Rs 2,500 crores, the FM said. Under this new provision, the employers will continue to pay 12 per cent, while employees will have the option to pay 10 per cent for the next three months.

This will benefit nearly 3.6 lakh establishments and as many as 72.22 lakh employees will also avail this benefit, said FM Sitharaman.

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The India Wire Team

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