Navigating PF Deduction and Deposit Issues in India: What You Can Do

Are you facing the frustrating situation where your previous employer has deducted the Employee Provident Fund (EPF) contributions from your salary but failed to deposit the funds properly? Understanding the legal obligations and the processes available can help you take appropriate steps to resolve such issues. This article aims to guide you through the process of handling EPF deduction and deposit non-compliance effectively.

Initial Communication with Employers

Firstly, it is crucial to seek clarification from both your old and new employers. Send a formal letter to both employers, requesting the necessary details within a week. After waiting for ten days, file a grievance online through the online portal of the Employees Provident Fund Organization (EPFO).

Letter to Employers

Example letter:

Dear [Employer's Name],

I am writing to seek clarification regarding the Employee Provident Fund (EPF) contributions that were deducted from my salary but have not been deposited as per the norms. Can you kindly provide the details of these deductions and the reasons for the non-deposit of the amounts mentioned? This information is crucial for resolving the issue at hand.

Please revert to this email with the necessary documentation within the next week. If I do not receive a response in this timeframe, I will proceed with filing a formal grievance through the Employees Provident Fund Organization (EPFO) online portal.

Thank you for your cooperation.

Sincerely,
[Your Full Name]
Mobile: [Mobile Number]

Documentation and Evidence

It is extremely important to have evidence of the EPF deduction from your salary. Keep the original documents in a safe place. If you have any evidence regarding the deduction but no proof of deposit, retain the copies and visit the concerned regional office of EPFO. File a formal complaint with xerox copies of your documents and obtain a receipt. Additionally, do not part with the original documents, except in the court of law.

Complaint Against the Employer

In the event that your employer fails to provide the necessary information or deposit the funds, you can lodge a formal complaint with the EPFO. Attach a copy of your wage/salary slip clearly indicating the EPF deduction. Invoking the statutory penal provisions of relevant acts, such as the Employee Provident Fund and Miscellaneous Provisions Act, may help recover the dues from your employer. You can also approach the police under sections 406 and 409 of the Indian Penal Code (IPC) for criminal proceedings.

Lodging a Formal Complaint

Immediately, submit a written complaint to the Regional Provident Fund Commissioner (RPFC) within your jurisdiction. This not only violates the EPF and Mediclaim Policies but also constitutes a criminal offense. RPFC are known for their prompt action against such employers. It is crucial to document the following points:

Personal Experience and Steps Taken

For instance, an employee who worked for a company for almost 7 years and resigned in June 2019 discovered that the employer deducted PF contributions from their salary for the last 2 years of service but did not deposit the amounts.

Despite the provision of Form 16 and Salary Slips indicating the deduction, the employer still did not deposit the employee or employer contributions. After more than a year, the employee's previous employer had not responded to emails or provided a final settlement statement, despite multiple attempts to contact HR and the accounting department.

Given the non-responsive nature of the stakeholders, the employee decided to seek legal remedy and file a formal complaint with the RPFC. The complaint included a detailed wage/salary slip with explicit mention of EPF deductions and relevant documentation. The employee also lodged a complaint with the police under sections 406 and 409 of the IPC.

To resolve such issues effectively, it is essential to follow the structured approach outlined above. Documentation, formal complaints, and legal actions can provide a pathway towards resolving the non-compliance issues related to EPF deductions and deposits.