Section 14 of EPFMA : Section 14: Penalties

Explanation using Example

Imagine a scenario where an employer, ABC Pvt. Ltd., has deducted provident fund contributions from its employees' salaries but fails to deposit these amounts with the Employees' Provident Fund Organization (EPFO). The employer has done this to use the funds for other purposes, hoping that the delay or non-payment will go unnoticed. However, the EPFO conducts an audit and discovers the discrepancy.

Under Section 14(1A) of The Employees Provident Funds and Miscellaneous Provisions Act, 1952, ABC Pvt. Ltd. is liable for legal action. The employer can be punished with imprisonment for a term that must be at least one year and also be fined ten thousand rupees, since the non-payment involves employees' contributions that were deducted but not paid. This serves as a deterrent to employers who might consider misusing employees' funds.