2024-11-30 16:36:16 :
New Delhi: The country’s statutory retirement fund administrator Employees’ Provident Fund Organization (EPFO) has asked Bajaj Allianz Life Insurance Company to pay liquidated damages $According to an order seen by HT, provident fund (PF) of Rs 121 crore was paid within 60 days, concluding a protracted investigation.
The Regional Provident Fund Commissioner, EPFO, in a case between EPFO (through its enforcement officer) and Bajaj Allianz Life Insurance Co. Ltd, Pune, has ruled that the insurance major had split the salary component into various benefits to “avoid” payment of provident fund dues. The order added that these allowances qualify as “universal payment allowances” and are therefore part of the basic salary against which the employer’s Provident Fund contribution will be calculated.
“The respondent was owed remittances in the amount of $1,21,04,57,803, for the period from 09/2014 to 08/2019, as per the following distribution pattern…,” the order issued on November 27 said.
Under the Provident Fund and Miscellaneous Provisions Act, both employers and workers are required to contribute 12% of an individual’s basic salary to the pension fund administered by the EPFO.
The insurance company failed to pay provident fund fees for “transportation allowances”, “other allowances” and “professional allowances” based on the effective salary ceiling. $15,000, the order said.
What Bajaj Allianz said
The insurance company said in its submission that its failure to pay provident fund charges was not “intentional” as it had “incorporated” these allowances into the basic salary as per the Supreme Court judgment.
EPFO disagrees with the argument of the insurance companies that these allowances do not count as basic salary. HT contacted Bajaj Allianz Life Insurance for comment. The company has yet to respond.
Also Read: Problem with EPF. Can you say no?
“It is therefore the case of the law enforcers that the accused retained the minimum basic salary and divided the emoluments of the employees into various allowances just to evade statutory compliance including provident fund,” the order said.
The EPFO order also stated that the salary sheets submitted by the defendant (Bajaj Allianz Life Insurance) were inconsistent with its annual profit and loss accounts. The EPFO Commissioner also ruled that the unpaid dues arose from five amounts due and, with interest, the total amount was shocking. $122.13 Crores.
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