BL Kashyap, well-known construction company, has been accused by the Employees' Provident Fund Organisation (EPFO) of evading provident fund payments to employees for five years till 2010-11. The EPFO has slapped dues and fines worth Rs 593 crore on B L Kashyap, which denies the charges.
The case highlights a gigantic flaw in the present system of forced savings adopted by the government. Rules say that all workers will get 12% of their basic pay deducted at source and deposited to a provident fund account. Employers will make a matching contribution. The same rules apply to organised sector employees and to contract workers.
The latter would also include seasonal workers, construction crews and security personnel. The existing PF rules benefit organised workers who work in the same sector for a long time, transfer their accounts from job to job and manage to claim their savings after years of work. It is of little help to India's vast labour force of construction crews, security guards, fish processing women and contract workers who are shuffled between employers and construction sites frequently.
The existing PF system hurts them in two ways. First, it forces a deduction from their salaries; second, they never get to claim these forced savings as they move from job to job because the procedural requirement is beyond them. As a consequence, the number of unclaimed accounts - and funds - keeps piling up at the EPFO. This must stop.
There has to be a savings scheme that is the sole preserve of the worker, which stays constant even as she moves from job to job. Surprisingly, such a scheme, called the New Pension System (NPS) does exist, but it is poorly marketed and publicised. The government should make the NPS the preferred vehicle for receiving and deploying the forced savings of contract workers.
It must also allow voluntary migration of existing PF account holders to the NPS. Once workers get a permanent account for long-term savings that they can access at will, they will be more particular about PF deductions and episodes like the B L Kashyap case would become rare.(Source Economic Times)
3 comments:
Thank you for the eye opener issue prevailing in the existing system. Not only in the business of construction,security guards, fish processing & contract works but even in the highly organised industry such as IT/ITes, Pharma, Retail etc employees face a major issue in either withdrawing or transferring the PF amount. Here the role of Business HR emerges as a prime importance in educating & guiding the employees in terms of the current laws with respect to the statutory facilities available to the employees. Generally we tend to ignore the employees who put down their papers but if these employees are handled with care, they might rejoin in the future which can be a sort of post employee engagement initiative.
Thanks Dev for your comments. Nice observations.
Cheers,
Debashish
Thank you for your continuous inspiration. As you say that "No one can motivate you except you, yourself", but I must say that you have been always a "Medium" of motivation for me :)
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