Tuesday, 7 January 2020

Get to know rules of opening an Provident Fund account

Government has denied media reports that claimed change in the Employees Provident Fund (EPF) rules for the recruiter. The Labour and Employment Ministry issued a statement recently in this regard citing the current
threshold of 20 employees for opening PF account of an employee will continue and there is no proposal to bring it down to 10 as reported by various media reports.

Denying the media reports of change in Employees Provident Fund rules 2020, the ministry statement read, "Ministry of Labour and Employment denies media reports published in some newspapers today that the applicability threshold has been brought down from present establishment with 20 or more employees to 10 or more employees for the purpose of application of Employees Provident Fund and Miscellaneous Provisions Act 1952 (EPF & MP Act).” 

It added, "The reports said that new rules of Employees Provident Fund will apply from January 01, 2020, and under the new rules establishments having 10 or more employees will be covered under the said Act.” The statement issued by the ministry clarified there is no change in the threshold for application of the EPF & MP Act and there is no such proposal in the Ministry at present.

However, the Ministry of Labour and Employment statement reiterated that the voluntary option for the recruiter to open PF account of its employees even when they don't meet the threshold limit, will continue. As per the voluntary option for an employer, an establishment that doesn't meet the threshold of minimum 20 employees can open the PF account of its employees and join the EPF, if they wish. Under the Section-1(4) of the EPFO Act, the majority of the employees and the employers may join the EPF scheme voluntarily.


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