Deducting the employee's share from salary and not remitting it is not a mere compliance lapse. It is the employer using your money, and the statute treats it seriously.
Step 1: verify the default
Log in to the EPFO member portal with your UAN and download the passbook. It shows month-by-month credits for the employee and employer shares. Compare against your salary slips. Print or save the passbook and the slips; that comparison is your entire case.
- Your UAN, and the passbook downloaded from the EPFO member portal
- Salary slips showing the deduction, for every month in issue
- Bank statements showing the net salary credited
- The appointment letter and any revision letters
- The written demand to the employer, with proof of dispatch
- The employer's establishment code, from the passbook or a colleague's
- A month-by-month table of deducted against deposited, which is what the enquiry turns on
Step 2: written demand
Write to HR and the employer's authorised signatory, itemising the months not credited, and asking for the ECR challans as proof of remittance. Keep it factual and keep the reply.
Step 3: EPFO
The Code on Social Security, 2020 is now operative. Section 125 provides for determining applicable dues. References below to Section 7A and the older EPF Act describe the earlier framework and must be checked against the savings provisions, the contribution period and the applicable scheme before use in a current application.
- File a grievance on EPFiGMS, the EPFO's online grievance system, with the passbook extract and salary slips.
- Write to the Regional Provident Fund Commissioner having jurisdiction over the establishment.
- The Commissioner can initiate an enquiry under Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 to determine the amount due, and can levy damages under Section 14B and interest under Section 7Q.
- Recovery can proceed as arrears of land revenue, including attachment of the employer's bank accounts.
What a Section 7A enquiry actually looks like
It is worth knowing, because employers treat it far more seriously than a grievance ticket. On an enquiry under Section 7A, the Commissioner decides whether the Act applies to the establishment and determines the amount due, and for that purpose he has the same powers as a civil court to enforce attendance, examine a person on oath, require the discovery and production of documents, receive evidence on affidavit and issue commissions. The enquiry is a judicial proceeding. No order can be made without giving the employer a reasonable opportunity to be heard, and an employer against whom an order is passed ex parte may apply within three months to have it set aside on showing that notice was not served or that he was prevented by sufficient cause from appearing.
Two consequences follow for you. First, the wage registers, the ECR challans and the attendance records that the employer will not show you can be summoned in that enquiry, so ask for them by name in your complaint. Second, the money the employer avoids by not depositing is expensive to keep: under Section 7Q the employer is liable to pay simple interest at twelve per cent a year, or a higher rate specified in the Scheme, on any amount due from the date it fell due until it is actually paid; and under Section 14B the Commissioner may additionally recover damages not exceeding the amount of the arrears, after hearing the employer. Interest and damages are separate heads, and both are recoverable in addition to the principal.
If the determined amount is still not paid, recovery does not go back to square one. The dues are certified and recovered in the manner the Act provides for arrears, which includes attachment and sale of the employer's movable and immovable property and attachment of its bank accounts. An appeal against a Section 7A order lies to the Tribunal within the period prescribed, and it is ordinarily conditional on a deposit, which is itself a reason employers settle at this stage.
The amount deducted from your wages is your money. Failure to deposit it after deduction attracts Section 405 IPC, now Section 316 of the Bharatiya Nyaya Sanhita, criminal breach of trust, in addition to the penal provisions of the EPF Act itself. Saying so in your written demand tends to concentrate minds.
Practical points
- Do not resign and then start chasing. Raise it while employed if you safely can, because access to records is easier.
- If several colleagues are affected, complain together. EPFO acts far faster on a collective complaint about an establishment than on a single member grievance.
- Keep your UAN activated and KYC seeded, so that transfer and withdrawal are not blocked later by the same employer's inaction.
- Non-deposit also affects your pension service under EPS, so raise it even if the amounts look small.
- Non-deposit does not reduce what you are owed on exit. Provident fund, gratuity and unpaid wages are separate heads and should be pursued together rather than traded off: our note on gratuity rules, eligibility and calculation in India covers the second of them, and where the default surfaced only after you were pushed out, our note on wrongful termination and employee rights in India deals with the exit itself.
- Raising a provident fund default is protected activity in substance: a termination that follows a complaint to the EPFO invites the obvious inference, and the timing should be documented at the time rather than argued about later.