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Employees Provident Fund and Miscellaneous Provisions Act

Section:Scheme 31, 32 :Recovery Of Employees Contribution

Obligation : To recover an employees contribution from wages only as specified

Type:Preventive Compliance Frequency: Monthly

Action to be taken:
Employees contributions to PF which have been paid by the employer can be deducted only from the employee's wages. Deductions are permissible only for sums which have been paid as contributions for the relevant period. Deductions made from the wages of a member paid on a daily, weekly or fortnightly basis should be totalled up to indicate monthly deductions.
Where a false declaration has been made by the employee at the time of joining that he was not a member of the fund, it is permissible to recover the employee's share which has been paid or is payable for that period, and where no deductions have been made, to make deductions from the subsequent wages with the written permission of the Inspector (Para 9, EDLIS Scheme)

Audit Requirement:
Are employee's contributions recovered from their wages only in the manner permitted and only against actual contributions for the relevant period ?

Supporting Documents:
Written Confirmation of Compliance

Related Triggers:
Deduction or Fine From Wages
Payment of Wages

Related Keywords:
Contributions
Deduction/Fine From Wages
Provident Fund
Remuneration/Wages/Compensation

Related Sections:
Employees Deposit Linked Insurance Scheme, 1976
9:Employers contribution not to be deducted from the wages of the employees:
Notwithstanding any contract to the contrary, the employer shall not be entitled to deduct the employers contribution payable by him under this Scheme from the wages of the employees or to recover it from them in any other manner. Employees Provident Fund Scheme, 1952
Chapter:Contributions| 31:Employers share not to be deducted from the members:
Notwithstanding any contract to the contrary the employer shall not be entitled to deduct the employer's contribution from the wage of a member or otherwise to recover it from him.


Employees Provident Fund Scheme, 1952
Chapter:Contributions| 32:Recovery of a member's share or contribution:
(1) The amount of a member's contribution paid by the employer or a contractor shall, notwithstanding the provisions in this Scheme or any law for the time being in force or any contract to the contrary, be recoverable by means of deduction from the wages of the member and otherwise :

Provided that no such deduction may be made from any wage other than that which is paid in respect of the period or part of the period in respect of which the contribution is payable :

Provided further that the employer or a contractor shall be entitled to recover the employee's share from a wage other than that which is paid in respect of the period for which the contribution has been paid or is payable where the employee has in writing given a false declaration at the time of joining service with the said employer or a contractor that he was not already a member of the Fund:

Provided further that where no such deduction has been made on account of an accidental mistake or a clerical error, such deduction may, with the consent in writing of the Inspector, be made form the subsequent wages.

(2) Deduction made from the wages of a member paid on daily, weekly or fortnightly basis should be totalled up to indicate the monthly deductions.

(3) Any sum deducted by an employer or a contractor from the wages of an employee under this Scheme shall be deemed to have been entrusted to him for the purpose of paying the contribution in respect of which it was deducted.