Employer Raaj Ended by EPFO for Withdrawals

In India non-government employee during their are protected by the social security in the forms of pensions under he Employees Provident Fund and Miscellaneous Provisions Act, 1952. This Act plays a very important role in developing the corpus to be used during the post-retirement stage of an employee.  

Employees covered under the EPF Act contribute 12% of their wages every month towards their provident fund.  The employer in turn makes a matching contribution to the fund.  The money goes into a fund managed by the Employees' Provident Fund Organization, the apex decision making body, under the aegis of the Ministry of Labour and Employment.

The government permits employers to manage own provident fund schemes, provided they comply with certain conditions.  The EPF Act offers flexibility of withdrawals - an employee can withdraw for higher education or for the purchase of a house.  Withdrawals may also be made for paying premium amount on one's life insurance policy. 

Up until recently, for making a withdrawal from the Employees Provident Fund (EPF), an employee required attestation from the employer.  Employees filing withdrawal forms manually were required to have the necessary forms signed and sealed by their respective employers.  This was a mandatory step, which often resulted in harassment of employees at the hands of the employer.  Instances of employers withholding consent to disgruntled or former employees were quite common.

The EPFO has paid heed to the harassment complaints raised by employees and has eliminated this mandatory requirement of obtaining employer attestations.  In its recent Notification regarding 'New EPF Withdrawal Forms,' the EPFO granted relaxation to the subscriber by allowing submission of withdrawal forms without any employer attestations. 

For Forms kindly visit -  EPFO introduced New Form 19 & 10C for PF Withdrawal

According to the Notification, any employee who has linked their Know Your Customer (KYC) details i.e., Aadhar number and bank account details, with their Universal Account Number and whose KYC are verified by their respective employer, can now submit the new EPF withdrawal forms directly to his or her respective jurisdictional EPF office without having to obtain the  employers' attestation.  

An employee will no longer need the approval of his or her employer to withdraw money from the EPF corpus, thus making the process for an employee hassle free.  The EPFO has launched simplified brief one page form for claiming withdrawal, requiring a minimum amount of information to be submitted. 

Not only this, they had moved a step closer to online settlement of EPF withdrawal claims, the EPFO has recently allowed its subscribers to file their applications directly to the body without employers' attestation.  The coming year will see certain other significant changes to the EPF Act.  The government has proposed amendments, which if passed, will bring about the following changes. 

Simplification of definition of 'Wages' is proposed

EPFO will change the Applicability under section 1