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Employee
‘Employee’means
any person who is employed for wages in any kind of
work, manual or otherwise, in or in connection with
the work of an establishmentand who gets wages directly
or indirectly from the employer and includes any person
employed by or through a contractor in or in connection
with the work of the establishment.
Basic
Wages
‘Basic
Wages’ means all emoluments which are earned by
an employee while on duty or on leave or on holidays
with wages in either case in accordance with the terms
of the contract of employment and which are paid or
payable in cash, but does not include-
- the
cash value of any food concession;
- any
dearness allowance; house rent allowance, overtime
allowance, bonus, commission or any other similar
allowance;
- any
presents made by the employer.
Dearness
Allowance
‘Dearness
Allowance’ shall include the cash value of any
food concession allowed to the employee.
Retaining
Allowance
‘Retaining
Allowance’ means an allowance payable to an employee,
in respect of any period during which the establishment
is not working, for retaining his services.
Employees’
Contribution
The
employee’s contribution shall be equal to the contribution
payable by the employer in respect of him, i.e. 10%
or12% as the case may be.The employee is not required
to contribute towards Deposit Linked Insurance Fund.If
an employee so desires, he may opt to make contribution
to the fund at a higher rate also.The employer shall
not be, however, underan obligation to contribute at
such higher rate.
The
employer is required to deduct the employee’s contribution
from his wages and deposit the same into the provident
fund account along with his own contribution.
Central
Government’s Contribution
The
Central Government shall also contribute @ 1.16% of
the pay of the members of the Employees’ Pension
Scheme to the Pension Fund.Where, however, the pay of
the member exceeds Rs. 6,500 p.m., the contribution
payable shall be limited to the amount payable on his
pay of Rs. 6,500 only.
Administrative
Charges
An
employer is required to pay the following administrative
charges also:
- 1.10%
of the employees’ wages subject to a minimum
of Rs.5 every month, for administration of Provident
Fund.
- 0.01%
of the employees’ wages subject to a minimum
of Rs.2 every month, for administration of Deposit
Linked Insurance Fund.
Time
and Mode of Deposit
The
employer shall within 15 days of the close of every
month deposit the total amount of the employer’s
and employee’ contributions and administrative
charges with P.F. Commissioner into the respective accounts
maintained at the State Bank of India.Separate cheques
should be used for contributions and administrative
charges.
Investment
of Funds and Interest
The
amounts deposited into the Provident Fund Account are
invested in specified securities and under Special Deposits
Scheme.The Commissioner shall credit to the provident
fund account of each member, interest at such rate as
the Central Government may determine, on the balance
standing to his credit on first day of April each year.The
rate of interest notified for the year 2001-02 is 9.5%.Interest
is also earned on the Pension Fund and Deposit Linked
Fund Accounts.
Protection
of Provident Fund
The
amount standing to the credit of any member of the fund
cannot be in any way assigned or charged, nor it is
liable to attachment under any decree order of the court
in respect of any debt or liability incurred by the
member.
Employers’
Obligations
The
obligations of the employers under the three schemes
have been summarised below:
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To
pay the employer’s and employees’ contributions
and administrative charges as required under the
Act/schemes.
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To
furnish to the Provident Fund Commissioner, returns
in the prescribed forms, such as returns of ownership/management,
of membership of employees, of employees leaving
the service during the month, monthly and annual
returns of contributions made by employer and employees.
-
To
maintain records/registers such as: Contribution
Cards, Eligibility Register, Provident Fund Register,
Provident Fund Ledger, Inspection Book, etc.
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To
allow the employees to avail of temporary/permanent
withdraws out of their contributions, pension, life
insurance benefit, insurance benefit, etc. permissible
under the schemes.
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To
transfer within the specified time, the accumulated
balance in the account of an employee leaving the
service and obtaining re-employment in another establishment
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