InvestorQ : Will companies need to pay penalty for delay in payment of employees’ provident fund contributions?
Anusha Savla made post

Will companies need to pay penalty for delay in payment of employees’ provident fund contributions?

Answer
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nishi Shah answered.
4 months ago


No, recently EPFO has announced that considering the coronavirus pandemic and its impact on the liquidity of companies, no penalty shall be levied for delay in payment of employees’ provident fund contributions. Generally, employers are required to deposit dues of a month’s salary by the 15th of next month, along with a grace period of 10 days.

However, due to the present circumstances the EPFO allowed employers to file returns without making simultaneous payment of dues. This notification was issued for the salaries of April month and soon EPFO is planning to issue the same notification for the month of May, 2020.

Amidst the coronavirus-induced lockdown the businesses are unable to function properly and are facing severe liquidity issues due to which they are unable to make timely payments to their employees as well as of statutory dues. Therefore, in order to provide some relief to such businesses the Finance Ministry has decided to provide relaxations in payment for now.

EPFO’s Central Fund commissioner also said in a press conference that “during the lockdown period we are not going to impose any damages. This is our pro stakeholder’s attitude that we are following.” This means that there are chances the relaxation shall be applicable until the business cycle would be normalized a bit.