The Employees' Provident Fund Organisation (EPFO) has set up a national task force to monitor the recovery of current and past provident fund (PF) dues from companies, all totalling up to over Rs 21,000 crore, Moneycontrol has learnt from people familiar with the development.
The taskforce of the state-backed retirement corpus manager has been instructed to suggest a course of action in high value cases that have PF dues worth over Rs 1 crore.
Separately, a special cell within the EPFO has been constituted to monitor the recovery of PF dues from companies that are going for liquidation under the Insolvency and Bankruptcy Code (IBC), 2016.
A dashboard of IBC cases has been developed to monitor on a daily basis the companies undergoing liquidation, officials have said. The EPFO is also working on developing a digital portal that would track all the arrears and the progress of recovery.
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It is also leant that the EPFO has categorised pending dues into two buckets - immediately realizable’ (IR) and ‘non-immediately realizable’. Of the total Rs 21,000 worth of dues pending, IR dues amount to Rs 2,980 crore while the non-IR dues are over Rs 18,500 crore. Details of the major companies with pending EPF dues are not yet publicly available.
The government official quoted above said that field officers at the zonal and national level have been asked to conduct recovery drives and monitor the progress on a regular basis. "The taskforce will meet on a monthly basis and submit their reports,” the government official said.
Read More: What to do if your employer defaults on EPF dues: A quick guide
Commenting on the development, experts told Moneycontrol that the creation of the taskforce, along with the special cell to oversee PF recovery from companies undergoing liquidation is a positive step that will strengthen the enforcement of law.
While the taskforce itself does not have adjudicatory powers, it is expected to enhance coordination, speed up recovery efforts, and ensure consistent follow-up in cases of large defaults - making the overall recovery process more efficient and systematic, experts said.
"Recovery can be made through attachment and sale of the employer’s assets, garnishee orders, or by filing claims before the resolution professional or liquidator in insolvency cases," said Aditya Bhattacharya, Partner, King Stubb & Kasiva, Advocates and Attorneys.
Adil Ladha, Partner at Saraf and Partners said the initiative will help in EPFO’s recovery efforts. "A structured, centralised monitoring mechanism could help bridge gaps in recoveries and ensure that employees’ social security entitlements are not diluted on account of other issues such as a complex insolvency process," said Adil Ladha.
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