Oct 132016


Section 1. Short title, extent and application.-

(1) This Act may be called the Employees‟ Provident Funds and Miscellaneous Provisions Act, 1952.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) Subject to the provisions contained in section 16, it applies –

(a) To every establishment which is a factory engaged in any industry specified in Schedule I and in which twenty or more persons are employed and

(b) To any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify, in this behalf:

Provided that the Central Government may, after giving not less than two months‟ notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than twenty as may be specified in the notification.

(4) Notwithstanding anything contained in sub-section 3 of this section or-sub-section 1 of section16, where it appears to the Central Provident Fund Commissioner, whether on an application made to him in this behalf or otherwise, that the employer and the majority of employees in relation to any establishment have agreed that the provisions of this Act should be made applicable to the establishment, he may, by notification in the Official Gazette, apply the provisions of this Act to that establishment on and from the date of such agreement or from any subsequent date specified in such agreement.

(5) An establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below twenty.

From the above it can be said that Employees Provident fund is applicable to three types of establishment:

Situation 1:

Where the company is in the process of winding up an official liquidator has been appointed:

When the company is in the process of winding up and official liquidator has been appointed, the provident fund contribution need not to be deposited for a few employees who have been retained by the liquidator.

The court in the case of Regional Provident Fund Commissioners v Rohatas Industries Limited, observed that it is not in dispute that:

  1. Different units of the Company have been out of operation.
  2. These units were closed since a long time.
  3. They were not running at all at present.

The establishment was in the process of winding up and not engaged in any industrial activity specified in Schedule 1 nor specially notified under section 1(3)(b) of the act. Hence, in such circumstances establishment is not covered under EPF and hence contributions need not to be deposited.

Situation 2:

Will a factory or establishment be covered under the EPF Act when the construction activity has started and there are more than 20 workers?

The above analogy may be applied in the present case also. Since the specified activities are in the process of establishing the factory which is yet to come into existence and start operations. It does not meet the specification stipulated in section 1(3)(a). Hence, if the establishment is not notified under section 1(3)(b) the statutory requirement for applicability of the act provision is not fulfilled. Hence, no liability arises.


Hence, from the above discussion it can be safely concluded that a factory needs to deposited contribution only when in is working under normal operations. Contribution for construction period and post liquidation needs not to be deposited.

Oct 052012

Buying a Payroll Software: Focus on!!

Employee’s Payroll Management has always been a challenge for both Large & Small companies. Small businesses have problems managing the payroll, as they simply do not have the capacity to do so. They have limited staff with tight schedules. Payroll management is just too time consuming and requires too much effort for the staff of a small company. Large companies encounter problems with Payroll Management because errors often occur in the tracking of data for thousands of employees.

There are several factors you need to consider when selecting a Payroll Management Software. Before you purchase payroll software, you had better take into consideration the user-friendliness of the software which offers the user joy of working and ensure that you are well familiar with the user interface of the software. Obviously, nobody would like to purchase complicated Payroll Management software which would harden payroll management.

A well designed and professional Payroll Management Software can easily take care of the calculation of Salary, PF, ESIC, PT, TDS, while it also ensures that all the things happen timely and the employees get their salary on the pay day. The greatest advantage of software to manage payroll related things is that it saves time and makes payroll less resource intensive. Where you need two to three people dedicatedly for payroll calculation monthly, this single software can manage it in quite less time.

Focus on!!

1. Modules Availability: Check for the Modules incorporated in the software like Employee Management, Salary Processing, Leave & Attendance, Online Leave Applications, Work flows, Online TDS Projections & Declarations, Reimbursements, Supplementary Payments, Publish News / Polls / Surveys / FAQ and analyze result, Employee Self Service Module, Recruitment, Training, Appraisal etc.

2. Payroll Components (Earnings & Deductions) : This feature lays emphasis on payroll’s vital function. Make sure the software has user defined earnings and deduction feature which is most necessary to your company. Look out for the software which is capable for user defined Earning and Deductions. This is simply for the reason that it is likely that there would be changes in your Salary Components / Structure in the near future.

3. Statutory Compliance: One of the biggest concerns of the company is that it has to be in compliance with the government rules and regulations. If you process your employees’ payroll, you had better take care of the payments of statutory head like PF, ESIC, Profession Tax and TDS on time, to avoid being landed yourself into huge Interest / penalty.

4. Integration with Attendance / Biometric Machine: This feature is practically going to save your time due to automated functioning of integration of Biometric / Attendance Machine with the payroll software. This is nothing but a real time integration of your attendance with your payroll system, so that no further need arises to manually punch the attendance data of employees manually in the payroll software. In fact, this will make the process of attendance tracking very easily and efficiently.

5. Integration with Accounting Software: Are you facing a difficulty of doing a data entry for the payroll records twice. If so then go for the software which has an in-built integration of Employees Payroll information with your Accounting software. This will allow you to import the data directly in the Accounting software. This will save time & minimize the data entry mistakes.

6. Simplified System: One of the criteria for buying the payroll software should be to see if it is Easy, User-friendly & flexible enough to handle all your Payroll requirements.

7. Quality Technical Client Support: Look for quality technical customer support when you choose a vendor for payroll software. When an error occurs in the payroll application, the most requisite help is the instant and efficient technical support from vendor who provided you with software. This means no nerve-racking wait on hold to speak with a representative who is hardly well-prepared to tell you everything about the software.

For more information and to take a free demo of EasyPAY – Payroll Management Software
Please visit http://www.sensysindia.com