Provident fund is regulated by the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 (EPF & MP Act). The Act was enacted with the main objective of making some provisions for the future of industrial workers after their retirement and for their dependents in case of death. It provides insurance to workers and their dependents against risks of old age, retirement, retrenchment or death of the workers. It is applicable to every establishment which is engaged in any one or more of the industries specified in Schedule I of the Act or any activity notified by Central Government in the Official Gazette and employing 20 or more persons.
However, the Act shall not apply to any establishment:-
• Registered under the Co-operative Societies Act 1912 or under any other law for the time being in force in any State relating to co-operative societies employing less than fifty persons and working without the aid of power; or
• Belonging to or under the control of the Central Government or a State Government and whose employees are entitled to the benefits of contributory provident fund or old age person in accordance with any scheme or rule framed by the Central Government or the State Government governing such benefits; or
• Set up under any Central Provincial or State Act and whose employees are entitled to the benefits of contributory provident fund or old age person in accordance with any scheme or rule framed under that Act governing such benefits; or
The Act is administered by the Government of India through the Employees' Provident Fund Organisation (EPFO). EPFO is one of the largest provident fund institutions in the world in terms of members and volume of financial transactions that it has been carrying on. It is an autonomous tripartite body under the control of Ministry of Labour with its head office in New Delhi. It aims to extend the reach and quality of publicly managed old-age income security programs through its consistent efforts and ever-improving standards of compliance and benefit delivery system to its members. This way it seeks to contribute to the economic and social well-being of the country.
The Act aims to provide for institution of provident funds, family pension funds and deposit linked insurance funds for the employees in the factories and other establishments. Accordingly, three schemes are in operation under the Act. These schemes taken together provide to the employees an old age and survivorship benefits, a long term protection and security to the employee and after his death to his family members, and timely advances including advances during sickness and for the purchase/ construction of a dwelling house during the period of membership. These three schemes are as follows:-
Whoever for the purpose of avoiding any payment to be made by himself under this Act or of enabling any other person to avoid such payment, knowingly makes or causes to be made any false statement or false representation, shall be punishable with imprisonment or with fine or with both. Companies which have employee strength of 20 or more are required to be registered with PF Department. The capacity of 20 includes contract employees like housekeeping, security or other contractual workers in the business. Those companies which do not have the endorsed number of employees but willing to register themselves to provide the advantages of Provident Fund to their employees can register voluntarily with the Regional Provident Fund Office. Registration has to be done within One month from the date of hiring 20 employees. Any delay may result in a penalty.