The most (in)famous case of a company not submitting provident fund (PF) dues of its employees is that of Kingfisher Airlines. The Financial Express reported in March that the Employees Provident Fund Organisation (EPFO) could attach properties and seize bank accounts of the Vijay Mallya-promoted firm.
The newspaper said the labour ministry has already formed a squad of enforcement officers to verify the compliance position of the firm with respect to dues of all its employees. But Kingfisher Airlines is not the only firm in the country which has defaulted on PF dues.
According to information submitted by Labour Minister Bandaru Dattatreya in the Lok Sabha, at least 10,000 firms have been paying up PF dues in the past four years. The table alongside has details. In 2015-16, about 1,692 firms based in Maharashtra did not pay their dues, second only to Tamil Nadu.
This was a huge spurt from 955 firms which defaulted the previous year. The labour minister did not specify why these firms have defaulted on their dues. Though there could well be some cases of fraud, it is likely that many of these firms are struggling to stay afloat because of the economic slowdown. Tamil Nadu was home to the maximum defaulting firms for the four years for which data is available.
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Interestingly, it is not only private sector firms but also government-owned companies that are defaulters. The labour minister’s statement said that 1,195 public sector entities have defaulted payment of their contributions in 2014-15 owing about Rs 1,263 crore. Of this Mumbai-based firms accounted for Rs 100 crore.