Provident Fund-Principal Employer Liabilty

[Gourav Arora]

Experts.

 

If a company follow a process of hold  EPF at the time of payment to contractor and pay back EPF when contractor submit challan of depsoit of EPF. In case contractor not  submit the challan of payment of EPF, Whether it is company liabilty to pay EPF to government. and in case of delay or non depsotion of EPF whether  penaly or interest is liable on principal employer,.

Whether contractor can file case against company for release of EPF hold by company. (pls refer if any deceided case law is there) .

Regards

[DR.MARIAPPAN GOVINDARAJAN]

In respect of contract it is obligation of the principal employer to ensure that the PF contribution is regularly remitted to the credit of the Government by the Contractor. If the contractor failed to do so, the liability falls on the principal employer for the payment of PF contribution, interest for the delay in remittance and other consequences. The principal employer may claim the amount paid in this regard from the contractor by adjusting his bills or file a suit for the recovery.

AI Summary

Principal employer liability: failure of contractor PF remittance can make employer liable for contributions, interest and recovery. Principal employer is liable to ensure contractor's Provident Fund contributions are remitted; if the contractor fails, the employer must pay outstanding contributions and is liable for interest and other consequences, and may recover amounts paid from the contractor by adjusting bills or by filing suit for recovery.