Overview of Employee’s Provident Funds (EPF) And Miscellaneous Provisions Act, 1952


Employees’ Provident Funds (EPF) And Miscellaneous Provisions Act, 1952 is an important piece of Labour Welfare Legislation which was enacted by the Parliament of India to provide social security benefits to the workers of industries. It is implemented by the Employees Provident Fund Organisation. Presently, the act and the schemes framed thereunder provide for three types of benefits:

• Contributory provident fund.
• Pensionary benefits to the Employees or the family members of the employee.
• Insurance cover to the members of the provident fund.

Therefore, we can say that there are three schemes framed under this act.

Historical Background

Initially this Act was known as The Provident Fund Act, 1952. This Act is implemented by Employees Provident Fund Organisation of India. This organization have a mission to provide security in terms of old age income. The Employees Provident Fund bill was passed by both the houses of the Parliament which is Rajya Sabha and the Lok Sabha and received the assent of the President on 4th March ,1952. From 1st August 1976, the nomenclature of the Act was changed as Employees’ Provident Funds (EPF) And Miscellaneous Provisions Act, 1952. Employees’ Provident Funds (EPF) And Miscellaneous Provisions Act, 1952 has been amended 15 times.

Extent of this Act

The provisions of Employees’ Provident Funds (EPF) And Miscellaneous Provisions Act, 1952 extended to whole of India except the state of Jammu and Kashmir and also the State of Sikkim where it has not been notified so far after its annexation with the Union of India.

Objectives behind the enactment of this Act

Following are the objectives which are kept in mind before the promulgation of Employees’ Provident Funds (EPF) And Miscellaneous Provisions Act, 1952:
 To provide security to the industrial worker after his retirement.
 To provide money to the dependents of industrial worker after early death.
 To provide a kind of social security to the industrial workers.
 To provide the retirement and old age benefits.
 To provide risk free deposit acceleration .
 It also inculcate healthy habit of saving.

Nature and Scope

Employees’ Provident Funds (EPF) And Miscellaneous Provisions Act, 1952 is beneficial to the employees working in factories and many other establishments. This Act applies to each and every kind of factory which is engaged in any industry specified in Schedule and other establishments which employ twenty or more workman. Employees’ Provident Funds (EPF) And Miscellaneous Provisions Act, 1952 does not apply to any factory or any establishment which is registered under Co-operative Societies Act, 1912 or any other statutory law relating to Cooperative Societies engaging less than 50 persons and working without the aid of power. Central Government has the discretionary power to extend the Act to nonfactory units or establishments.

Read – The Fugitive Economic Offenders Act, 2018: An Interpretation

Applicability of this Act –

• This act applies to every establishment with less than 20 employees (5 or more in case of cinema ) is eligible to opt for PF registration to protect employee’s benefits. However, it is mandatory for Companies with more than 20 employees to register themselves under EPFS.

• Once a company is covered under the Employees Provident Funds (EPF) And Miscellaneous Provisions Act, 1952, then if its employee strength drops below 20, it will still be covered.

Conditions for applicability

According to Employees’ Provident Funds (EPF) And Miscellaneous Provisions Act, 1952 there are following conditions to be fulfilled for activating the applicability:

• There must be a manufacturing process carried.
• Industry must be engaged in manufacture of any products listed under Schedule.
• In industry or an establishment there must be 20 persons to be employed in.

Not applied to certain organisations-

Under section 16 of Employees’ Provident Funds (EPF) And Miscellaneous Provisions Act, 1952 does not apply to the following:
• Cooperative societies which is employed with less than 50 persons and working without the aid of power.
• Voluntary organizations engaged in leprosy eradication programmes.


Employees’ Provident Funds (EPF) And Miscellaneous Provisions Act, 1952 is administered by Central Board of trustees. The Chief executive officer of Employees PF organization is the Provident Commissioner who act as head of this organization.


• Employees withdrawing not exceeding Rs. 6500 per month are eligible for the membership of the provident fund.
• Every employee which is in connection with the work of a factory or the establishment result required to become a member of the provident fund from the date of his joining to the factory or an establishment.

Key components of this Act

1 Employee Provident Fund , 1952 This scheme guarantees the promotion of retirement savings.
2. Employee Pension Scheme, 1995 (EPS): This scheme guarantees to provide post retirement pension.
3. Employee Deposit Linked Insurance Scheme, 1976 (EDLI): On the other hand, this scheme provides life insurance to family members in case of members sudden death.


Statutory rate of contribution to the provident fund by the employees and employers is 10% of the pay of the employees. The wages include basic wage,DA, including cash value of food concession and retaining allowance if there is any. Central government have a discretionary power to enhance this rate to 12%. These contributions after paying advances and final withdrawals are to be invested in government securities, negotiable securities or bonds, national saving certificates.

Withdrawal rules

Employees’ Provident fund can be withdrawn by the member to his credit in the fund in the following situations:
 At the time of retirement from the service after attaining the age of 55.
 At the retirement period on account of permanent or total incapacity.
 At the time of migration from India for permanent settlement in abroad.
 At the time of termination of service in course of miss retrenchment.

Nomination criteria

1. For the nomination purpose a separate nomination form shall be filled in duplicate and one copy duly accepted by the PF office be maintained by the member.

2.If in case there is no nomination whole amount shall be paid to the members of the family in equal share except:

 Sons (majors).
 Sons of deceased son who is major.
 Married daughters whose husbands are alive.
 Married daughters of deceased son whose husband are alive.

Obligations for employers

There are various obligations for the employers that are listed below:

 Arranging to pay the employers and employees contribution with administrative and inspection charges.
 Maintaining accounts contributed by employer and his employees.
 Furnishing of particulars regarding the owners, occupiers, directors, managers, partners or any other persons who have ultimate control over the factory or an establishment.
 Transferring the amount of accumulated contribution to the credit of the employee of an exempted establishment if he leaves and obtained reemployment.
 Submission of consolidated report within 3 months to the RPFC.
 Implementing of directions issued by the Central Board of trustees.
 Submission of a statement of every contractor within last 7 days of every month.

Obligation for employees

 Providing Information for Employees particulars about himself or nominee as required by the Provident Fund Organisation.
 Informing the employer in writing at the time of employment whether he is a member of provident fund or not.


Following are the benefits attained under this act:
 Superannuation on attaining the age of 58.
 Benefit at the time of retirement.
 Benefits at the time of permanent total disablement.
 Benefit situation when the death occurs after the retirement.
 Benefit of children pension to the beneficiaries of employees.
 Benefits of orphan pension to the beneficiaries of employees.


• Under Section 14 of Employees’ Provident Funds (EPF) And Miscellaneous Provisions Act, 1952 the penalties are governed.
• Section 406 and Section 409 of Indian penal code also relates to the penalties.
• A suit can be filed for the revenue under Revenue Recovery Act.

Read – Penalties Under The Industrial Disputes Act, 1947


According to my view Employees’ Provident Funds (EPF) And Miscellaneous Provisions Act, 1952 have many benefits which make it significant and prominent in today’s world. This Act promotes the idea and habit of domestic saving which is important in today’s era. This Act provides ample of benefits along with the penalties to those people who violates the provision of aforesaid act which ensures a sense of social security among the along with their dependent beneficiaries of provident funds. Overall, I would say this act is a must act for India to regulate the provident funds.

This Article Is Authored By –

Vaishali Malhotra, Student of B.ALL.B (2015-2020), Kurukshetra University, Kurukshetra

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