News: EPFO blocks 9 lakh PF accounts

Compensation & Benefits

EPFO blocks 9 lakh PF accounts

Nine lakh employees from 80,000 firms duped system to benefit from govt's job formalization scheme.
EPFO blocks 9 lakh PF accounts

Government has found 9 lakh beneficiaries in as many as 80,000 companies took benefit of  Centre's job formalisation scheme, Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), even though they were not eligible, leading to around Rs 300 crore loss to the exchequer.

These companies allegedly duped the system by taking financial incentives meant to bring new employees in the formal economy, a report published in the Business Standard said. The PMRPY scheme incentivises employers registered with the Employees' Provident Fund Organisation (EPFO) for job creation by paying full contribution of employers' side to Employee Pension Scheme (EPS) and Employees' Provident Fund (EPF).

Government has found 9 lakh beneficiaries in as many as 80,000 companies took benefit of  Centre's job formalisation scheme, Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), even though they were not eligible, leading to around Rs 300 crore loss to the exchequer.

These companies allegedly duped the system by taking financial incentives meant to bring new employees in the formal economy, a report published in the Business Standard said. The PMRPY scheme incentivises employers registered with the Employees' Provident Fund Organisation (EPFO) for job creation by paying full contribution of employers' side to Employee Pension Scheme (EPS) and Employees' Provident Fund (EPF).

The government has already recovered around Rs 222 crore through EPFO after blocking provident fund accounts (over 9 lakh) in question, the daily said. The scheme was launched in August 2016 and was meant only for new employees who were hired after April 1, 2016. As per the report, around 8,98,576 employees from 80,000 companies were found to be taking benefit of the scheme till July 16, 2019.

PMRPY scheme was rolled out in the year 2016 with a view to incentivize employers for creation of jobs in the formal economy. As per the scheme, the government would pay complete employer's contribution of 12 percent  i.e. both for EPF and EPS for 3 years in respect of new joinees who have been registered with the EPFO on or after after April 1, 2016, with salary up to Rs 15,000 per month.

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Topics: Compensation & Benefits, C-Suite

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