Amendments underway to the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952; Ministry invites comments and suggestions by 22nd September 2019

Amendments underway to the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952; Ministry invites comments and suggestions by 22nd September 2019

August 29, 2019 Industries, LAB, states 0

In a notification dated 23rd August 2019 the Ministry of Labour and Employment proposes to amend the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952. The Ministry has prescribed time till 22nd September 2019 for comments and suggestions on the Draft Bill, that must be submitted in the given format.

Submissions can be made

  1. By post to Shri Rahul Bhagat, Director, Ministry of Labour and Employment, Room No. 302, Shram Shakti Bhawan, New Delhi
  2. By email to or

Format for comments –

The Highlights of the proposed amendment of Employees’ Provident Funds & Miscellaneous Provisions Act, 1952

  1. Wages –

The Act incorporates the definition of Wages in tune with the Code of Wages, 2019 in place of the existing definition ‘basic wage’. The present scenario of calculating Provident Fund contribution on basic wage, dearness allowance and retaining allowance will be changed to fixing a percentage for allowances beyond which all remuneration will be included in wage.

New definition – 2(n)

Wages means all remuneration whether by way of salary, allowances or otherwise, expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in rasped of his employment or of work done in such employment, and includes, –

(i) basic pay;

(ii) dearness allowance; and

(iii) retaining allowance, if any: but does not include—

(a)any bonus payable under any law for the time ben in force, which does not form part of the remuneration]

payable under the terms of employment;

(b)the value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the appropriate Government;

(c)any contribution paid by the employer to any person or provident fund, and the interest which may have accrued thereon:

(d)any conveyance allowance or the value of any travelling concession;

(e)any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment:

(f)house rent allowance;

(g)remuneration payable under any award or settlement between the parties or order of a. court or Tribunal;

(h)any overtime allowance

(i)any commission payable to the employee;

(j)any gratuity payable on the termination of employment:

(k)any retrenchment compensation or other retirement benefit payable to the employee or any ex gratia payment made to him on the termination of employment:

Provided that, for calculating the wages under this clause, if payments made by the employer to the employee under clauses (a) to (i) exceeds one half, or such other per cent, as may be notified in the Official Gazette by the Central Government, of the all remuneration calculated under this clause, the amount which exceeds such one-half. or the per cent. so notified, shall be deemed as remuneration and shall be accordingly added in wages under this clause.

Explanation I- Where an employee is given in lieu of the whole or part of the wages payable to him, any remuneration in ‘kind by his employer, the value of such remuneration in kind which does not exceed fifteen per cent. of the total wages payable lo him, shall be deemed to form part of the wages of such employee.

Explanation II— For the purposes of this clause, -retaining allowance” means allowance payable for the time being to an employee of any factory’ or other establishment during any period in which the establishment is not working, for retaining his services.

  1. Limitation period for inquiries –

A limitation period of five years has been proposed for initiating inquiries and a time frame of 2 years is provided to assessing officers to  close all inquiries.

  1. Priority of payment of contribution over other debts –

Payment of contribution or any amount due under this Act has been prioritized over other debts, with the substitution of Section 11.

  1. Enhanced penalties –

The quantum of all the penalties have been enhanced by ten times by amending Section 14 and Section 14 AA.

  1. Composition of certain offences –

Provision has been made to resolve small defaults by compounding them at specified rates instead of initiating a criminal trial against them.

  1. Option for National Pension Scheme –

Subscribers of Employee Provident Fund are to be provided an option to opt for National Pension System and avail its benefits. Additionally the National Pension System has been defined by the proposed amendment.

New definition – 2(ja)

National Pension System shall have the same meaning as assigned to it in clause (i) of sub-section (1) of Section 2 of the Pension Fund Regulatory and Development Authority Act, 2013

  1. Guidelines for granting exemptions –

Stronger guidelines for granting exemptions are proposed, with regard to past performance, net worth, group performance, minimum strength of workers, corpus of the companies etc.

  1. The Act proposes to prescribe different rates of contribution for such period or class of employee for whom EPF is optional.

Source Ministry of Labour and Employment

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