The Employees’ Provident Fund Organisation (EPFO) on April 4th 2025 has issued a fresh circular clarifying the procedures for the payment of past contributions by employers, specifically when they are unable to remit dues through the standard Electronic Challan-cum-Return (ECR) system.
Key Highlights of the Circular:
Allowance of Demand Draft Payments:
Employers facing challenges in making electronic payments can now pay past dues through a Demand Draft (DD). This is applicable only for one-time payments of past dues, provided the employer commits to using internet banking for all future remittances.
Conditions for Demand Draft Payments:
- Approval Required: The Officer-in-Charge of the Region must be satisfied with the employer’s request and confirm that this is a one-time payment.
- DD Details: The Demand Draft should be made in the name of the Regional Provident Fund Commissioner (RPFC) of the concerned region and payable at the branch where the Regional Office holds its bank account.
Employer Undertaking:
Employers must submit an undertaking confirming that the payment is for past dues and that they will comply with digital payment norms for future contributions. This undertaking will be crucial for verification if any claims arise later.
Timely Collection of Dues:
The circular emphasizes that all possible efforts should be made to collect returns from the employer in the prescribed manner.
Recovery of Damages and Interest:
Employers are also required to pay damages and interest on delayed contributions. These should be calculated and collected as per the guidelines specified in the EPFO Compliance Manual.
Why This Matters:
This decision comes in response to requests from various EPFO field offices, acknowledging that certain situations may hinder electronic payments. By permitting Demand Draft payments under controlled conditions, EPFO aims to ensure that past contributions are cleared without causing undue hardship to employers, while still promoting digital payment practices for future transactions.
Next Steps for Employers:
- Verify Eligibility: Confirm that the payment is a one-time settlement of past dues.
- Prepare the Demand Draft: Make it payable to the RPFC of the concerned region.
- Submit an Undertaking: Provide a formal declaration committing to digital payments for future contributions.
- Complete Required Documentation: Ensure all necessary documents are submitted alongside the payment.
This move reflects EPFO’s balanced approach to enforcing compliance while accommodating practical challenges faced by employers.
