Not all companies can register under the EPF act due to specific rules. So, which companies are eligible to register under the EPF Act? Recent changes were made in the EPF Act, which states which companies are eligible for the scheme.
As it is clearly known that an organization that employs 20 or more people has to register under the EPF Act. However, in the last few years, there had been discussions that the number of required employees should be reduced. There were statements that companies with 10 or more employees should register for the EPF Act. However, the Central Government denied these statements. The Government decided that companies with 20 or more employees will register for this scheme.
So, any establishment or organization with 20 or more than 20 employees need to register under the EPF Act as per the rules.
Why Are Companies With Less Than 20 Employees Not Eligible To Register For EPF?
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The sole reason why a company with less than 20 employees is not eligible to register for the EPF Act is safety. The EPFO takes this rule seriously and does not want any employee to suffer from any problems during a pension.
Various start-ups have less than 20 employees. If the EPFO approves such companies under the EPF Act, then there is a risk. There is no guarantee that a start-up will succeed or no. In such cases, if the employee registers for the EPF account, then it will be risky for him/her too. If an employee of a start-up company registers for EPF, then he/she has to contribute 12% of the monthly salary to the account. Not only the employee, but even the employer has to contribute towards the account. If the start-up company goes into loss, then there won’t be any contribution. If there is no contribution for 36 months, then the account becomes null. Due to this, the savings of the employee will go into waste.
In such cases, the employee would be at a loss and not recover the money that he/she had contributed to the EPF account.
Therefore, to ensure that the employees do not face such losses, the EPFO has made such rules. However, the voluntary option is still available for the employees. Any employee who is serving in a company with less than 20 employees can register for EPF voluntarily. However, the employer should be aware of this, as he/she also has to contribute towards the employee’s EPF account.
Procedure To Register For EPFO
There is a certain procedure that the organization needs to follow to register under the EPF Act. What is the procedure? Here are the steps.
- An organization needs to visit the official website of the EPFO. In the portal, one needs to click on the option “ESTABLISHMENT REGISTRATION.”
- After selecting the option, one needs to read the Instruction Manual provided on the new page.
- After reading the Instruction manual, one needs to login with the UAN credentials. If you do not have your UAN credentials, then you can even login with other options.
- Now, one needs to fill in the employer’s details. After clicking on the “REGISTER BUTTON,” a new page will appear where you need to fill in the details. The details include name, PAN number, and as such.
- After filling out all the details, one needs to upload the documents required, and then the establishment will get registered.
Documents Required For Registering In The EPF Act
While registering for the EPF Act, an establishment needs to submit certain documents. The documents required are stated below.
- First sale bill
- First purchase bill of any raw material or machinery
- GSTT registration certificate
- Bank details like IFSC code, name, branch and as such
- Record of the strength of the employees
- Record of the salary and wages provided from the first day
- Cross cancelled cheque
- Salary and PF statement
- PAN card
- Incorporation date
- Factory license number, a plate of issue, and date of license
- Contacts of the establishment
- License information of the employer
- Activities
- Branch
- Employment details
After filling out the details and providing the documents, the establishment will get registered under the EPF scheme. However, while registering for the EPF Act, the employer needs to agree that he/she will contribute towards the EPF account of the employee every month and will not reduce the employee’s salary who has an EPF account.
Moreover, employees who have less than INR 15,000 monthly salary need to register for the EPF account as it has been mandatory. If an employee with more than the stated salary wishes to open an EPF account, then he/she can do so by taking the employer’s permission.
FAQs
1. Which companies are eligible to register under the EPF Act?
Any company which has more than 20 employees can register under the EPF Act. In addition to that, the company should be active for more than 3 years in the market and must be a recognized organization.
2. Can I register for the EPF Act even if my company has less than 20 employees?
Yes, you can register under the EPF Act even if the company in which you are working has less than 20 employees. However, for doing so, you need to take the permission of your employer as he/she will also have to contribute to the EPF account.
3. Can I get any other kind of PF scheme for my company?
If a company wishes to opt-out of EPFO and provide other types of PF schemes to its employees, they can do so. Provided, the PF private trust that the company provides has better facilities and is safe to use for the people.
4. Why should an employer register the establishment at the EPFO?
An employer should register at the EPFO portal as it has been made mandatory by the government. Any organization which has more than 20 employees has to register the establishment under the EPFO portal.
5. How can the employer modify the details post registration?
The employer can modify the details by visiting the official website. On the official website, they can change the details by providing the documents.
Conclusion
EPFO has designed this scheme to benefit the employees and provide them a financially safe future after they retire. To ensure that the employees do not face any losses, certain rules were made by the EPFO. One of the main rules is that an organization with less than 20 employees cannot register for the EPF Act. To ensure extra safety, EPFO has also ruled that an establishment that is less than 3 years of age cannot register under the EPF Act. These rules were made to protect the employees’ future and prevent any kind of loss that they might face in the future.
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