Employees’ Provident Fund under the 'Code on Social Security'

The new Labour Codes have been implemented and has made many changes to India’s present Labour law framework by codifying numerous Central laws. Amongst these is the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 which establishes three national social security programs, which are:

  • Employees’ Provident Fund
  • Employees’ Pension Scheme
  • Employees’ Deposit Linked Insurance Scheme

Appointment of officers of Central Board

The Central Government shall appoint a Central Provident Fund Commissioner who shall be the Chief Executive Officer of the Central Board and shall also function as the head of the Employees’ Provident Fund Organization. The Central Provident Fund Commissioner shall be subject to the general control and superintendence of the Central Board in the discharge of his functions under this Code.

The Central Government shall also appoint a Financial Advisor and Chief Accounts Officer to assist the Central Provident Fund.


The Central Government may, by notification

  • Frame a scheme to be called the Employees' Provident Fund Scheme for which the provident funds shall be established under this Chapter for employees or for any class of employees and specify the establishments or class of establishments to which the said scheme shall apply;
  • Frame a scheme to be called the Employees' Pension Scheme for the purpose of providing for—
    • superannuation pension, retiring pension, or permanent total disablement pension to the employees of any establishment or class of establishments to which this Chapter applies;
    • widow or widower's pension, children pension or orphan pension payable to the beneficiaries of such employees; and nominee pension;
    • frame a scheme to be called the Employees' Deposit Linked Insurance Scheme for the purpose of providing life insurance benefits to the employees of any establishment or class of establishments to which this Chapter applies;
    • frame any other scheme or schemes for the purposes of providing social security benefits under this Code to self-employed workers or any other class of persons.
    • The scheme may provide all or any of its provisions shall take effect either prospectively or retrospectively on and from such date as may be specified on that behalf in the scheme.


    The Central Government may, for the purposes of—

    (a) The Provident Fund Scheme, establish a Provident Fund where the contributions paid by the employer to the fund shall be ten percent. of the wages for the time being payable to each of the employees (whether employed by him directly or through a contractor), and the employee's contribution shall be equal to the contribution payable by the employer in respect of him. If any employee so desires, be an amount exceeding ten percent. of the wages, subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable.

    (b) The Pension Scheme, establish a Pension Fund in the manner specified in that scheme by that Government into which there shall be paid, from time to time, in respect of every employee who is a member of the Pension Scheme, —

    1. such sums from the employer's contribution under clause (a) not exceeding eight and one-third percent. of the wages or such percent. of wages, as may be notified by the Central Government;
    2. such sums payable as a contribution to the Pension Fund, as may be specified in the Pension Scheme, by the employers of the exempted establishments under Section 143 to which the pension scheme applies;
    3. such sums as the Central Government after due appropriation by Parliament by law in this behalf, specify;

    (c) The Insurance Scheme, establish a Deposit-Linked Insurance Fund in the manner specified in that scheme by that Government into which there shall be paid by the employer from time to time in respect of every such employee in relation to whom he is the employer, such amount, not being more than one percent. of the wages or such percent. of wages as may be notified by the Central Government for the time being payable in relation to such employee.

    Contribution in respect of employees and contractors

    The amount of contribution (that is to say, the employer's contribution as well as the employee's contribution in pursuance of any scheme and the employer's contribution in pursuance of the Insurance Scheme) and any charge for meeting the cost of administering the fund paid or payable by an employer in respect of an employee employed by or through a contractor may be recovered by such employer from the contractor, either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.

    A contractor from whom the amounts may be recovered in respect of any employee employed by or through him may recover from such employee, the employee's contribution under any scheme by deduction from the wages payable to such employee. Notwithstanding any contract to the contrary, no contractor shall be entitled to deduct the employer's contribution or the charges from the wages payable to an employee employed by or through him or otherwise to recover such contribution or charges from such employee.

    Transfer of accounts

    Where an employee employed in an establishment, relinquishes his employment therefrom and obtains employment in any other establishment then, his accumulated amount in provident fund account or pension account, as the case may be, shall be transferred or dealt with in the manner as may be specified in the Provident Fund Scheme or the Pension Scheme, as the case may be.


    Any person aggrieved by an order passed by any authority may prefer an appeal to the Tribunal constituted by the Central Government. Every appeal shall be filed in such form and manner, within such time and accompanied by such fees as may be prescribed by the Central Government.

    No appeal by the employer shall be entertained by the Tribunal unless he has deposited with Social Security Organization the concerned twenty-five percent. of the amount due from him as determined by an officer under section 125.

    The Tribunal shall endeavor to decide the appeal within a period of one year from the date on which the appeal has been preferred.


    Knowledge of Regulatory Compliances is very necessary to run an establishment without any fear of attracting penalties or punishment. Hence, every establishment should have a good Compliance Management System to ensure smooth running and to maintain efficiency.

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