If contractor not submitting PF challan on time or after 15 of each month what liability or penalty is being arises on Employer under which contractor deploying his labour.
From India, Jaipur
From India, Jaipur
3131
Gaurav,
The principal employer is the one on whom the final liability for payment of the PF dues lies upon. In case the contractor deployed by the principal employer defaults with respect to the monthly remittance time aspect, the PFO would send a notice (and eventually follow it up with a summons, if not attended within 15 days/time allotted) once they realise that there has been a delay in payment.
PFO generally conducts this reconciliation once a year.
Last year, after the new Govt. came into force, a directive was issued to all PF Offices to audit and reconcile the PF records for the previous 5 years. On an average, almost 75% of the member companies at each of the regional PF Offices were issued notices for some or the other issues related to short-payment, non-payment, delay in payments, etc. This was a massive exercise conducted by the PF Office and lot of cases were resolved/closed after payment of dues & penalty with interest by the defaulted establishments.
In my opinion, this was a very important activity carried out by the PFO all over the country considering the fact that the future plan was to transform all PF related activities online (make it online). So, cleaning of previous records had to be done. The advantage for member companies/establishments is that there is minimum of paper work with regard to submissions now and the withdrawal/settlement of dues take very little time (provided all previous records are clean and details furnished in the forms are accurate). The UAN is also an part of this initiative which enables number portability for your PF account. Form 5 consisting of employer details could also be filled up online (paperless activity). I am told that there are quite a few more friendly initiatives that are in line to be released by the PFO in the coming months.
Regards, A.B.
From India, Mumbai
The principal employer is the one on whom the final liability for payment of the PF dues lies upon. In case the contractor deployed by the principal employer defaults with respect to the monthly remittance time aspect, the PFO would send a notice (and eventually follow it up with a summons, if not attended within 15 days/time allotted) once they realise that there has been a delay in payment.
PFO generally conducts this reconciliation once a year.
Last year, after the new Govt. came into force, a directive was issued to all PF Offices to audit and reconcile the PF records for the previous 5 years. On an average, almost 75% of the member companies at each of the regional PF Offices were issued notices for some or the other issues related to short-payment, non-payment, delay in payments, etc. This was a massive exercise conducted by the PF Office and lot of cases were resolved/closed after payment of dues & penalty with interest by the defaulted establishments.
In my opinion, this was a very important activity carried out by the PFO all over the country considering the fact that the future plan was to transform all PF related activities online (make it online). So, cleaning of previous records had to be done. The advantage for member companies/establishments is that there is minimum of paper work with regard to submissions now and the withdrawal/settlement of dues take very little time (provided all previous records are clean and details furnished in the forms are accurate). The UAN is also an part of this initiative which enables number portability for your PF account. Form 5 consisting of employer details could also be filled up online (paperless activity). I am told that there are quite a few more friendly initiatives that are in line to be released by the PFO in the coming months.
Regards, A.B.
From India, Mumbai
As per Contract labour Act (R & A), if the contractor fails to honour statutory act, it is the liability of his Principal employer to cover it. Not only UAN for PF, but the Principal employer/Contractor mapping in ESI also helps in monitoring.. but a long way to go to create awareness and implement it across construction industry in India... to my knowledge many laws are ignored in this sector.
From India, Madras
From India, Madras
Thank you for the valuable suggestions, but actually i want to the actual liability which has been arises on employer when contractor not submit pf challan on time.
From India, Jaipur
From India, Jaipur
Thank you for the valuable suggestions, but actually i want to know the actual liability which has been arises on employer when contractor not submit pf challan on time.
From India, Jaipur
From India, Jaipur
I understand that liability of principal employer is to verify the deposit of PF/ESI dues. If it is late, then department will examine the matter (as stated above by our one member) and will charge interest and/or penalty. Principal employer is not supposed to perform the functions of ESI/EPF departments. However, principal employer must ensure deposit ESI/EPF dues in respect of employees deployed. And same must be verified before releasing payment of the contractor.
I hope, I am clear.
Thanks
V K Gupta
From India, Panipat
I hope, I am clear.
Thanks
V K Gupta
From India, Panipat
If contractors not submitting PF challan on time, then there is no liability of principal employer, because if contractor will submit PF challan after mandatory date, than he have to pay penalty for the same when PF authority will inspect his company account and contractor have to pay the same otherwise he will be punished according to law.
There is no loss of contractors' workers also, so no liability of principal employer.
From India, Pune
There is no loss of contractors' workers also, so no liability of principal employer.
From India, Pune
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