On his last day in service on November 30, central provident fund commissioner R C Mishra issued a directive that apparently prevents the EPFO from demanding PF contributions of workers whose employment was concealed by their employers before they were discovered.
The new rule puts the onus of identifying unaccounted employees on PF authorities, sources said, and allegedly allows the foreclosure of at least 200 cases as such employees cannot be individually identified. It also introduced a seven-year limitation after which investigation of defaulting establishments would lapse. The rule changes were made based on the recommendation of a panel of officers.
Before the directive, PF assessments were based on an extensive examination of accounts of companies, which allowed the EPFO to recover PF contributions from employers even if the attendance records of some employees were destroyed or not submitted for inspection. The EPF Act did not require identification of individual employees by PF authorities.
“This procedure is now prohibited by the CPFC’s November 30 directive. It is now practically possible for an employer to destroy his employment record and claim immunity from PF liability as PF authorities have now been saddled with the added responsibility of identifying each and every worker before any dues are recovered,” a senior EPFO official said.
Mishra could not be reached for comment.
P K Udgata, additional central PF commissioner (compliance) at the EPFO headquarters, denied that the directive was intended to benefit anyone. “The circular does not say anything about closure of cases...It was issued by the central PF commissioner and we will follow it. As I see it, the directive is intended to assess and investigate cases better,’’ he said.