Page 253 - DMGT516_LABOUR_LEGISLATIONS

Labour Legislations

Notes

Notes 1. If the pay of a member-employee increases beyond 6500 after his having
become a member, he shall continue to be a member but the contribution
payable in respect of him shall be limited to the amount payable on monthly
pay of 6500.
2. An employee ceases to be member of the Employees' Family Pension Fund at
the age of 60 years. The Employees' Family Pension Fund has been replaced
by Employees' Pension Fund w.e.f. 16.11.95.

10.2 The Employees' Provident Fund Scheme, 1952

The statutory rate of contribution to the provident fund by the employees and the employers, as
prescribed in the Act, is 10% of the pay of the employees. The Act provides that the Central
Government may enhance the statutory rate of contribution to 12% of wages in any industry or
class of establishments.
The contributions received by the Provident Fund Organisation from unexempted establishments
as well as by the Board of Trustees from exempted establishments shall be invested, after
making payments on account of advances and final withdrawals, according to the pattern laid
down by the Government of India from time to time. The exempted establishments are required
to follow the same pattern of investments as is prescribed for the unexempted establishments.
The provident fund accumulations are invested in government securities, negotiable securities
or bonds, 7-year national saving certificates or post office time deposits schemes, if any.

10.3 Employer's Obligations

1. The employer is required to contribute towards Employees' Provident Fund and Pension
Fund as:
(a) In case of establishments employing less than 202 persons or a sick industrial (BIFR)
company or 'sick establishments' or any establishment in the jute, beedi, brick, coir
or gaur gum industry – 10% of the basic wages, dearness allowance and retaining
allowance, if any.
(b) In case of all other establishments employing 201 or more persons – 12% of the
wages, D.A., etc.
An amount equal to 8.33% of the employees' pay shall be remitted to the Pension Fund
and the balance of employer's contribution will continue to remain in Provident Fund
account.
Where, the pay of the employee exceeds 5,000 p.m., the contribution to Pension Fund
shall be limited to 8.33% of his pay of 5,000 only. The employee may voluntarily opt for
the employer's contribution @ 8.33% of the full wages to be credited to Pension Fund.
2. Towards Deposit-Linked Insurance Fund, he has to pay: - 0.5% of the wages, D.A., etc.
3. The employer cannot reduce the wages or other benefits such as pension, gratuity or
provident fund of an employee, on account of the employer's contribution or administrative
charges payable by him.
4. 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. The

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