In the last few weeks, Byju’s has been garnering the headlines for all the wrong reasons. The Bengaluru-based ed-tech startup got severe backlash for laying off employees in huge numbers, and delaying the payment of provident fund to its employees for months. According to the media reports, Byju’s has got rid of 97 per cent ( ₹123.1 crore) of dues after the EPFO investigation into delayed Provident fund payments. Even though Byjus has paid the provident funds money now here’s what happens if the company doesn’t pay.
What are the EPFO rules?
The EPFO regulations make it compulsory for each month, that employers must credit provident fund payments by the 15th of the subsequent month in the account of employees.
What happens in case an employer delays EPF contribution?
To counter paying penalties and interest, employers must be required to check that Employee Provident Fund (EPF) contributions are made on time. According to a guideline laid out by the Supreme Court in February 2022, an employer is mandated to cover damages if an employee’s Employees’ Provident Fund (EPF) contribution is delayed.
What can employees do if EPFO contribution is delayed?
“Damages are restricted up to 100 per cent of the amount in arrears. The Fund added that 12 per cent annual interest is applied on the amount due for the entire period of delay,” EPFO informed via a tweet.
Tax and investment expert Balwant Jain said that in the case of any delay in payments by employers, individuals can file a complaint with the EPFO against the employer.
“An inquiry will be initiated by the EPFO against the employers,” said Jain.
He further added that EPFO can retain the damaged amount by charging interest on the late deposit as well.
Amount paid by the employee and employer in EPF
An employer is liable to pay a simple interest at the rate of 12 per cent per annum, according to section 7Q of the Employee’s Provident Funds and Miscellaneous Provisions Act, 1952.
How to check whether your employer has deposited EPF contribution
-Employees can check whether their PF contributions are deposited by logging into the EPFO portal.
EPFO also sends SMS alerts of the payment made in the PF account.
Founded by former teacher Byju Raveendran over a decade ago, Byju’s, which was once valued at $22 billion, has missed deadlines for filing its financial results and paying interest on a loan.
Amidst the recent chaos at the company, a senior employee at Byjus who requested anonymity said, “morale is at an all time low. Literally every person has a job portal open on their laptop at all times. Everyone wants to leave desperately before they asked to pack up overnight.”
“Right now the situation is so dismal, subordinates are sitting with their managers and job hunting.”
Post the initial refusal of the board exit, late last week, BYJU’S confirmed in a statement declaring that a few investors had left their board seats.
The manager of the company said, it’s all been eerily quiet so far.” He also added that the lack of communication between the companies leadership and employees was escalating tensions.
Valued at about $22 billion early last year, the education startup, has so far laid off thousands of employees since October in order to minimise costs post the drop in demand for online tutoring after the end of COVID-19 pandemic.
One of the analysts of the company said, “ The general sentiment is that the company is struggling. Almost 90% of us, myself included, waiting for a performance appraisal which hasn’t happened.”
