Provident Fund Not Paid by Company – What to Do?

Provident Fund Not Paid by Company? Learn what steps to take to recover unpaid PF, the penalties employers face, and your legal rights under EPF laws. Take action today to secure your PF savings and future.

The Employees’ Provident Fund (EPF) is a vital retirement savings scheme for salaried employees in India, governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Under this scheme, both the employer and the employee contribute a fixed percentage of the employee’s salary towards the EPF account, ensuring financial security post-retirement. Managed by the Employees’ Provident Fund Organisation (EPFO), this fund helps employees build a corpus over time, which can be withdrawn during retirement, emergencies, or unemployment.

Importance of Timely PF Contributions by Employers

Employers are legally required to deposit their and the employee’s contributions to the EPF account every month. Timely deposits are crucial because:

• They ensure continuous interest accumulation, increasing the employee’s savings.
• They secure financial stability for employees post-retirement or during emergencies.
• They help employees avail benefits like PF loans, withdrawals, and pension schemes.
  Failure to deposit PF contributions on time violates EPFO regulations, attracts penalties, and directly impacts employees’ financial security.

Common Issues Employees Face Regarding Non-Payment of PF

Many employees struggle with employers failing to deposit PF contributions on time or at all. Some common issues include:

• Provident Fund not paid by the company despite deductions from the salary.
• Delayed PF deposits, leading to financial loss due to missed interest.
• PF not credited after settlement, causing inconvenience in withdrawals.
• Employers holding PF amounts unlawfully.
• Legal complications and penalties due to employer non-compliance.

Understanding these issues and knowing the legal rights and corrective steps can help employees take the necessary actions to claim their rightful PF amount.

Understanding PF Contributions by Employers

The Employees’ Provident Fund (EPF) is a mandatory savings scheme designed to provide financial security to salaried employees after retirement. Both the employer and employee contribute to this fund, which is managed by the Employees’ Provident Fund Organisation (EPFO).

Breakdown of Employer and Employee Contributions to PF

Every month, a percentage of the employee’s basic salary and dearness allowance (DA) is contributed to the EPF. The contribution breakdown is as follows:

• The employee contributes 12% of their basic salary + DA to the EPF.
• The employer contributes 12%—but only 3.67% goes to EPF, while 8.33% is allocated to EPS (Employee Pension Scheme).
• Additional charges like EDLI and administrative fees are also borne by the employer.

Note: For companies with less than 20 employees, the contribution rate is 10% instead of 12%.

Rules Under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

The EPF Act, 1952, mandates that:

• All establishments with 20 or more employees must register under EPFO.
• Employers must deduct PF contributions from employees’ salaries and deposit them along with their share before the 15th of every month.
• Non-compliance leads to legal penalties and fines.
• Employees can track their PF balance using UAN (Universal Account Number).
• Employers cannot withhold or delay the deposit of PF contributions.

Any violation of these rules can result in strict legal action against the employer.

Why Timely PF Deposit is Essential for Employees

Employers must deposit PF contributions on time to ensure employees receive all benefits without financial loss. Delays in PF deposits can lead to:

• Loss of Interest: EPF earns compounded interest, and delays reduce long-term savings.
• Hurdles in Withdrawals: Employees may face rejection while withdrawing PF if deposits are incomplete.
• Legal Issues: EPFO can penalize the employer, but the employee still suffers due to missing contributions.
• Difficulty in PF Transfer: If switching jobs, incomplete PF deposits can cause transfer issues.

By law, employees have the right to demand timely PF contributions and take legal action against an employer who fails to deposit PF.

What to Do If Provident Fund Not Paid by Company?

If your employer is not depositing your Provident Fund (PF) contributions, it is essential to take immediate action. The Employees’ Provident Fund Organisation (EPFO) has several mechanisms to help employees recover unpaid PF. Follow these step-by-step actions to resolve the issue effectively.

Step 1: Check Your PF Balance Online via EPFO Member Portal/UAN

Before raising a complaint, verify whether your PF contributions are missing. You can check your balance using:

• EPFO Member Portal: https://unifiedportal-mem.epfindia.gov.in
• UMANG App: Download the UMANG app and check PF balance using your UAN.
• Missed Call Service: Dial 9966044425 from your registered mobile number.
• SMS Service: Send EPFOHO UAN ENG to 7738299899.
• If your PF balance is not updated, it indicates that your employer has not deposited the contributions.

Step 2: Confirm with HR/Accounts Department About Missing Contributions

Once you notice missing contributions, contact your HR or payroll department. Request the following:

• Payslips & PF deduction details (to verify if PF was deducted).
• Transaction proof from the employer.
• Clarification on delayed deposits, if any.

If your employer fails to provide a satisfactory response, proceed to the next step.

Step 3: Contact EPFO Through Grievance Portal (EPFiGMS)

If your employer is unresponsive, file a complaint via the EPFO Grievance Management System (EPFiGMS):

• Visit https://epfigms.gov.in/
• Click on “Register Grievance”
• Enter UAN, PF account details, and employer details
• Attach supporting documents like salary slips and UAN passbook
• Submit the complaint and track its status

EPFO will then contact your employer and initiate an inquiry into the missing PF contributions.

Step 4: File a Written Complaint with EPFO Commissioner

If your grievance is not resolved via EPFiGMS, you can directly escalate the issue by filing a written complaint to the Regional EPFO Commissioner.

• Submit a written letter to your nearest EPFO regional office.
• Attach salary slips, UAN statements, and other supporting documents.
• Request the EPFO Commissioner to take action against the employer.

Once the complaint is registered, the EPFO will summon the employer to explain the delay and enforce compliance.

Step 5: Lodge a Complaint on CPGRAMS (Public Grievance Portal)

If EPFO fails to resolve your issue, file a complaint with the Centralized Public Grievance Redressal and Monitoring System (CPGRAMS).

• Visit https://pgportal.gov.in/
• Click on “Lodge Public Grievance”
• Select EPFO as the concerned department
• Provide details of your complaint along with supporting documents

CPGRAMS ensures that government authorities intervene and take necessary action against defaulting employers.

Step 6: Consider Legal Action If the Issue is Unresolved

If the employer still does not deposit the PF amount, you can take legal action under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

• File a case in the Labour Court against the employer.
• Approach the Labour Commissioner for an investigation.
• The employer can be penalized with fines and even imprisonment under Section 14 of the EPF Act.

Taking legal action ensures that employers face strict penalties and are compelled to deposit the missing PF contributions.

If your employer is not paying your PF, act quickly and systematically. EPFO provides multiple channels to address this issue, so don’t hesitate to raise a complaint and take legal steps if required. Your PF savings are your right, and you must ensure that your employer fulfills their legal obligations.

Why is My PF Amount Not Credited After Settlement?

After applying for a PF withdrawal, employees usually expect the amount to be credited to their bank account within 7 to 20 days. However, delays can happen due to multiple reasons. Below are some common causes of delayed PF settlements and the steps you can take to resolve the issue.

Possible Reasons for Delayed PF Settlements

Employer Delay in Deposit

• If the employer has not deposited the PF contributions on time, the settlement may be delayed.
• Ensure that all past contributions are properly credited before applying for withdrawal.

Incorrect Bank Details in the EPFO Portal

• If the bank account number, IFSC code, or name does not match, the payment may fail.
• Ensure that your bank details are correctly updated in the EPFO portal.

Technical Issues at EPFO

• EPFO may experience server issues, payment processing delays, or pending approvals.
• Check the EPFO claim status to confirm whether the delay is from their end.

Pending KYC Verification

• If your Aadhaar, PAN, or bank details are not verified in the EPFO portal, the settlement may be delayed.
• Ensure that your KYC is updated and approved by your employer.

How to Track PF Withdrawal Status Online

You can check your PF withdrawal claim status using the EPFO Member Portal or UMANG app:

Through EPFO Portal:

1. Visit https://unifiedportal-mem.epfindia.gov.in
2. Log in using UAN and password
3. Click on ‘Track Claim Status’ under the Online Services tab

Through UMANG App:

1. Download and open the UMANG app
2. Select EPFO Services → Employee Centric Services
3. Click on ‘Track Claim’ and enter your UAN

Through SMS or Missed Call:

• Send “EPFOHO UAN ENG” to 7738299899 to receive claim status via SMS.
• Give a missed call to 9966044425 from your registered mobile number.

Steps to Raise a Complaint If PF Amount Is Not Credited

If your PF amount is not credited even after settlement approval, follow these steps:

Step 1: Contact Your Employer

• Confirm with HR whether they approved your PF withdrawal request.
• Ensure that all pending contributions are deposited.

Step 2: File a Grievance on EPFO Portal

• Visit https://epfigms.gov.in/
• Click on ‘Register Grievance’
• Select PF office, employer details, and attach UAN details
• Submit your complaint and track its status

Step 3: Raise a Complaint on CPGRAMS

• Visit https://pgportal.gov.in/
• File a public grievance against EPFO for delay in settlement.

Step 4: Visit EPFO Office in Person

• If online complaints do not work, visit your nearest EPFO regional office for a manual resolution.

If your PF withdrawal is delayed, first verify the claim status and then escalate the issue step by step. Ensuring your bank details, KYC, and employer contributions are correct can help avoid delays. If the problem persists, EPFO and legal channels are available to resolve the issue efficiently.

Can My Company Hold My PF Amount?

Many employees worry whether their company can withhold their Provident Fund (PF) contributions. Legally, employers cannot hold or delay PF deposits, as the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, mandates timely contributions. Let’s understand the legal aspects and what you can do if your employer fails to deposit your PF.

Legality of PF Deductions and Employer’s Role

PF contributions are legally protected

• PF is a statutory right of employees.
• Employers must deduct the employee’s contribution (12% of basic salary) and match it with their contribution.

Employer’s duty to deposit PF on time

• As per EPF Act, 1952, employers must deposit PF contributions before the 15th of every month.
• Failure to deposit PF on time can lead to legal penalties and fines.

Employer cannot withhold PF even during resignation or termination

• PF amount is managed by EPFO, not the employer, so they cannot block withdrawals.
• Employees can withdraw their PF even if the employer does not cooperate.

Employer’s Liability to Deposit PF Contributions as Per Law

Strict penalties for non-compliance

• If an employer fails to deposit PF, they are liable for penalties, fines, and even imprisonment.
• Under Section 14 of the EPF Act, an employer can face a fine of up to ₹50,000 and imprisonment of up to 3 years.

Interest and Damages for Delayed PF Payments

• EPFO imposes an interest penalty of 12% per annum on delayed deposits.
• Additional damages up to 25% of the amount may be levied.

Legal obligations under labor laws

• Non-payment of PF is treated as “wage fraud”, which can be challenged in Labour Court.
• Employees can file a complaint with EPFO, CPGRAMS, or the Labour Commissioner.

What to Do If the Company Refuses to Deposit PF?

Step 1: Verify PF Contribution

• Check your PF balance via UAN portal, UMANG app, or SMS.
• If contributions are missing, contact HR or payroll department for clarification.

Step 2: File a Grievance with EPFO

• Visit EPF Grievance Portal and lodge a complaint.
• Submit supporting documents like salary slips and UAN passbook.

Step 3: Escalate via CPGRAMS

• Register a complaint on CPGRAMS Public Grievance Portal.
• This ensures government authorities intervene.

Step 4: File a Complaint with the Labour Commissioner

• Visit the Labour Court or Labour Commissioner’s office to file a formal complaint.
• Legal action may result in penalties and prosecution against the employer.

Step 5: Take Legal Action

• Under Section 14 of the EPF Act, employers can be sued for non-payment.
• If your employer refuses to pay PF, you can file a case in the Labour Court.

Your employer has no legal right to hold or delay PF deposits. If they fail to deposit PF, report it immediately to EPFO and take legal action if necessary. Your PF savings are protected under Indian law, and non-payment by employers is a punishable offense.

What Happens If PF is Not Deposited by Employer on Time?

Employers are legally required to deposit PF contributions on time, ensuring that employees receive the benefits of accumulated savings and interest. If an employer fails to deposit PF contributions before the 15th of each month, it can have serious consequences for both employees and employers.

Consequences for Employees

Loss of PF Interest

• The EPF account earns an annual interest (currently around 8.15% per annum).
• If an employer delays contributions, employees lose interest on the missing amount.

Delays in PF Withdrawal/Transfer

• If an employee resigns or retires, incomplete PF deposits can delay withdrawals.
• During a job change, non-payment can affect PF transfer to the new employer.

Impact on Retirement Savings

• Missing contributions reduce overall long-term retirement savings.
• A lower PF balance can impact pension benefits (EPS) as well.

Tax Complications

• Delayed PF deposits may lead to tax issues since employers must deduct and deposit PF on time.
• If PF is not deposited, tax authorities may consider the salary as fully taxable.

Consequences for Employers

Legal Penalties for Non-Payment

• Under Section 14 of the EPF Act, 1952, non-compliance can lead to:
  • Fines up to ₹50,000
  • Imprisonment up to 3 years

Higher Contribution Arrears Due to Penalties

• Interest on Delayed Payments:
  • Employers must pay 12% interest per annum on the unpaid PF amount.
• Penalty for Late Deposits:
  • EPFO imposes additional damages ranging from 5% to 25% depending on the delay duration.

Legal Action by Employees & EPFO

• Employees can file grievances on the EPFO portal, CPGRAMS, or Labour Court.
• EPFO can seize employer assets or take legal action for repeated violations.

Company’s Reputation & Compliance Issues

• Non-compliance with PF rules can lead to legal audits, lawsuits, and reputational damage.
• Companies failing to deposit PF may lose government contracts or business licenses.

What Employees Should Do If PF Is Not Deposited on Time

• Check PF Balance via UAN Portal or UMANG App
• Talk to Your HR/Payroll Department
• File a Complaint on EPF Grievance Portal (epfigms.gov.in)
• Escalate the Issue to CPGRAMS Public Grievance Portal
• Approach the Labour Commissioner or Take Legal Action

If your employer does not deposit PF on time, report it immediately to EPFO. Delayed PF deposits affect your retirement savings and are a serious legal offense. Employers must follow strict PF regulations, and employees have the right to take action to ensure compliance.

What is the Penalty for PF Not Deposited by Employer?

Employers in India are legally bound to deposit EPF contributions before the 15th of each month. Failure to do so results in strict penalties, including financial fines, legal action, and even imprisonment.

Financial Penalties for Delayed Deposits

The Employees’ Provident Fund Organization (EPFO) imposes two types of financial penalties on employers who fail to deposit PF on time:

Interest on Late Payment (Under Section 7Q of the EPF Act)

• 12% per annum interest is charged on the unpaid amount for each day of delay.

Penalty/Damages for Non-Payment (Under Section 14B of the EPF Act)

• The employer must pay additional damages based on the delay period:

Example: If an employer delays a ₹50,000 PF deposit by 6 months, they may need to pay ₹12,500 extra as a penalty, along with 12% annual interest.

Legal Actions EPFO Can Take Against Non-Compliant Employers

Legal Notices & Recovery Action

• EPFO can issue legal notices and recover unpaid amounts directly from the employer’s bank account.
• The employer’s assets can be seized to recover outstanding dues.

Court Case & Prosecution

• EPFO can file a legal case against the employer for serious violations.
• Employees can also approach the Labour Court for justice.

Blacklisting of Companies

• Government contracts and business registrations may be cancelled if the company repeatedly fails to deposit PF.

Possible Imprisonment for Severe Violations

Under Section 14 of the EPF Act, 1952, non-payment of PF is a criminal offense:

• For first-time offenders – Up to 1 year imprisonment or ₹5,000 fine.
• For repeated offenses – Up to 3 years imprisonment and higher fines.
• For fraudulent PF deductions – Mandatory imprisonment of at least 6 months.

If your employer fails to deposit PF, they face strict legal consequences. Employees should report non-payment to EPFO, CPGRAMS, or the Labour Commissioner to ensure compliance.

Legal Action Against Employer for Not Paying PF

If an employer fails to deposit Provident Fund (PF) contributions, employees have the legal right to take action. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, protects workers and ensures employers fulfill their PF obligations.

Employee Rights Under EPF Laws

Mandatory Employer Contribution

• Employers must deposit 12% of an employee’s salary into their PF account.
• Any delay or non-payment violates EPF rules and is legally punishable.

Right to File a Complaint

• Employees can lodge a complaint with EPFO, the Labour Commissioner, or CPGRAMS.
• Employers can be fined or jailed for repeated violations.

Right to Claim Unpaid PF

• Employees can demand full payment of their PF, including interest and damages.
• In case of company closure, the EPFO can recover dues from company assets.

How to File a Legal Complaint Against the Employer

Step 1: Check PF Balance

• Log in to the EPFO UAN portal or use the UMANG app to verify missing contributions.

Step 2: Contact Employer/HR

• Ask the HR or payroll team about the missing PF contributions.

Step 3: Register a Complaint on the EPF Grievance Portal

• Visit EPFiGMS Portal
• Submit details about the employer’s failure to deposit PF.

Step 4: File a Complaint on CPGRAMS (Public Grievance Portal)

• CPGRAMS (pgportal.gov.in) allows employees to escalate complaints.

Step 5: Report to the Labour Commissioner

• Employees can approach the Labour Commissioner’s office if the issue remains unresolved.

Step 6: File a Case in Labour Court or Tribunal

• Employees can seek legal action against the employer in the Labour Court.
• EPFO may also file criminal charges against repeat offenders.

Role of Labour Court and Tribunal in PF Disputes

Labour Court’s Role

• Can summon employers for failing to deposit PF.
• Orders penalties, back payments, and compensation to employees.

EPF Appellate Tribunal

• Employees and employers can appeal PF-related disputes.
• Tribunal decisions can enforce employer compliance.

Supreme Court & High Court

• Employees can file a writ petition in the High Court/Supreme Court for serious cases.

Recent Case Laws & Examples

Case 1: EPFO Recovers ₹1 Crore from Defaulting Employer

• In 2023, the EPFO seized assets worth ₹1 crore from a private company that failed to deposit PF.

Case 2: IT Firm Penalized ₹50 Lakh for PF Non-Payment

• A tech company was fined ₹50 lakh and its directors faced criminal charges for non-payment.

Case 3: Employer Sentenced to Jail for PF Fraud

• A business owner in Mumbai was sentenced to 6 months imprisonment for PF fund misappropriation.

If your employer is not paying PF, take immediate action by filing a complaint with EPFO, CPGRAMS, or the Labour Court. The law is on your side, and employers who fail to comply will face severe penalties, fines, and legal action.

How to Prevent PF Non-Payment Issues in the Future?

To avoid PF-related issues, employees should proactively monitor their contributions and take timely action. Here are some key steps to ensure that employers comply with EPF rules.

Regularly Check PF Contributions Online

Use the EPFO Member Portal or UMANG App

• Log in to the EPFO UAN portal (https://unifiedportal-mem.epfindia.gov.in/)
• Use the UMANG app to check PF balance and passbook details.

Verify PF Deductions from Salary Slips

• Cross-check your salary slip to ensure PF contributions are deducted every month.
• If deductions are made but not credited, report the issue immediately.

Ensure UAN and KYC Details Are Updated

Keep UAN (Universal Account Number) Active

• Activate UAN on the EPFO portal and link it to your bank account, Aadhaar, and PAN.

Verify KYC Details

• Ensure correct bank details and Aadhaar number are linked to avoid withdrawal delays.

Link Mobile Number and Email ID

• Receive real-time SMS alerts for PF deposits and withdrawals.

Report Delays Immediately to EPFO

If PF contributions are missing, take action quickly:

• Step 1: Inform the HR or payroll department about the issue.
• Step 2: Lodge a complaint on the EPFiGMS (EPFO Grievance) Portal.
• Step 3: If unresolved, escalate the issue via CPGRAMS (Public Grievance Portal).

Monitor Employer Compliance

• Employees can check if the employer is regularly depositing PF via their EPFO passbook.

Seek Legal Help If Necessary

Consult a Labour Lawyer

• If the employer refuses to pay PF, a legal notice can be sent demanding unpaid dues.

Approach the Labour Commissioner

• The Labour Commissioner’s office can initiate legal proceedings against non-compliant employers.

File a Case in Labour Court

• As a last resort, employees can file a case in the Labour Court or Tribunal.

To prevent PF non-payment issues, employees should stay informed, check PF contributions regularly, and report any delays immediately. Employers failing to deposit PF can face heavy fines, legal penalties, and even imprisonment.

Conclusion

In conclusion, recovering unpaid Provident Fund (PF) requires prompt action from employees. By following the right steps, employees can ensure that their PF contributions are paid on time and recover any unpaid amounts from employers.

Summary of Steps Employees Can Take to Recover Unpaid PF

1. Regularly check your PF balance via the EPFO UAN portal or UMANG app.
2. Confirm the issue with your HR or payroll department and ensure there are no discrepancies in your records.
3. Report any delays or missing contributions to EPFO using the Grievance Portal and CPGRAMS.
4. File a formal complaint with the Labour Commissioner or take legal action in the Labour Court if necessary.

Importance of Employee Awareness and Timely Reporting

Employees must remain vigilant about their PF contributions to prevent issues. By regularly checking their salary slips and EPFO passbook, employees can catch any discrepancies early and report them promptly. Early intervention ensures timely resolution and protects employees’ retirement savings.

Encouragement to Take Proactive Legal Action if Needed

If an employer is not complying with PF regulations, employees should not hesitate to take legal action for provident fund not paid by company. The law is on your side, and there are several avenues available, including EPFO grievance portals, Labour Courts, and legal consultation. Taking proactive steps ensures that employers are held accountable, safeguarding employee rights and ensuring compliance with the law.

By being aware of your rights, staying informed, and acting quickly, you can protect your PF contributions and ensure a secure future. If the employer fails to meet their obligations, remember that legal avenues are available to secure what is rightfully yours.

FAQ

What should I do if my employer is not paying PF?

If your employer isn’t paying PF, first check your balance on the EPFO portal. Then, talk to your HR and file a complaint with EPFO or the Labour Commissioner if necessary.

What is the penalty for PF not deposited by employer?

Employers may face penalties ranging from 5% interest for delays up to 2 months, 10% for 2-4 months, and 25% for delays over 6 months.

Can my company hold my PF amount?

No, your employer cannot legally hold your PF amount. They are required to deposit the contributions under the Employees’ Provident Fund Act.

What to do if my PF amount is not credited after settlement?

Check for errors like incorrect bank details or pending KYC verification. If the amount is still not credited, raise a complaint via EPFO grievance portals.

How can I prevent PF non-payment issues in the future?

Regularly monitor your PF contributions on EPFO, keep your UAN and KYC details updated, and report delays immediately to EPFO.