Government committee clears the controversial EPFO circular
A review committee set up by the government has cleared the EPFO circular which proposed clubbing of all allowances with basic, for deduction of Provident Fund.
The tripartite panel set up by the Labour Ministry has endorsed the controversial EPFO circular issued On November 30, 2012 by the outgoing Central Provident Fund Commissioner (CPFC), R.C. Mishra.
The circular proposed clubbing of all allowances with basic pay for deduction of provident fund and redefined the process of assessment and inquiry for companies defaulting on PF contributions. The notification was an effort to check the practice of splitting of wages by employers to reduce their provident fund obligations. However it was put on hold following reports which criticised the move of the retirement fund body. The government later constituted a committee to look into the matter.
The review committee, constituted to look into the details of clubbing of allowances with basic pay for PF deductions, has supported the idea for enhancing the social security benefit under the EPF scheme run by the Employees’ Provident Fund Organisation (EPFO). As per a senior official of the Employee Provident Fund Organisation (EPFO), the circular has been revived and been sent to the Labour Ministry for further approvals.
“The committee’s suggestion would be vetted by the Labour Ministry and would be put before the EPFO’s apex decision making body the Central Board of Trustees (CBT) for taking final call on it,” a trustee and Secretary Bharatiya Mazdoor Sangh B N Rai told PTI. A senior EPFO official said that, “The suggestions of the committee have been already sent to Labour Ministry for scrutiny,” EPFO officials said. Early this year we published an article, “Squaring the PF Circular” that details the impact on employee salaries once the circular is implemented.