If you are a salaried employee, you would know about the employee provident fund scheme that is run by EPFO. The company pays a fixed amount in the employee's PF account. The employee also pays a fixed sum in his/her PF account. Together, this fund acts as a retirement corpus.
The employee gets the money after retirement. However, what happens if the employer is not paying his share of the money. Let's examine.
If the employer has not been paying his share into the employee's PF account, he will be liable to pay with a fixed interest rate, as per law. It is also considered a crime to not pay the employee's PF contribution. The government can also exact the money from the employer as per law with interest.
EPFO has fixed the rates of interest on delay in payments. It can charge a fine of 100 percent of the money not paid along with 12 percent yearly interest.
Employees can also register a complaint against the employer with EPFO.
Here are the rates: If the delay is 2 months or less, the employer will be liable to pay interest at 5 percent per annum; between 2-4 months, the rate is 10 percent; between 4-6 months, the rate is 15 percent; for 6 a delay of 6 months or above, the employer will have to pay an interest of 25 percent per annum.
