HR professionals in India must understand PF compliance requirements, including mandatory registration for establishments with 20 or more employees with the [Employees’ Provident Fund Organization (EPFO) Key duties involve monthly deduction and deposit of contributions by the 15th, timely filing of returns, providing employees with Universal Account Numbers (UANs), updating records, and assisting with PF transfers when employees leave.
Key PF compliance points for HR
- Registration and Enrollment:
- Mandatory for 20+ employees: Any establishment with 20 or more employees must register with the EPFO.
- Voluntary registration: Companies with fewer than 20 employees can also opt for PF registration.
- UAN issuance: Issue a Universal Account Number (UAN) to every eligible employee.
- Monthly Contributions:
- Both employee and employer contributions: Deduct 12% from the employee’s basic salary and dearness allowance and add an equal employer contribution.
- Deposit deadline: Deposit the total contributions with the EPFO by the 15th of every month.
- Maximum contribution: The contribution is on a maximum wage ceiling of Rs. 15,000 per month.
- Lower contribution rate: Some establishments with fewer than 20 employees or specific industries may have a 10% contribution rate, but this is subject to conditions.
- Administrative and Filing:
- Monthly returns: File monthly returns on the EPFO’s online portal, detailing contributions and employee records.
- Maintain records: Keep employee records accurate and up-to-date, including bank details and salary information.
- Compliance audits: Be prepared for periodic audits and maintain all necessary documentation.
- Employee-related procedures:
- Transfers: Assist employees with transferring their PF account or settling the balance when they leave the organization.
- Employee onboarding: Ensure new employees are enrolled and their UANs are generated promptly.
Importance of compliance
- Avoid penalties: Non-compliance can result in heavy fines, penalties, and legal action.
- Enhance employee retention: Proper PF management contributes to employee satisfaction and trust.
- Improve company reputation: Being a compliant employer builds a positive brand image.