ACCOUNTING
| Bring in BPOs, KPOs under PF net: Labour min Fri, 11 Feb 2011 01:02:08 GMT |
| NEW DELHI: The labour ministry has called for tightening of rules governing the employees provident fund to ensure that no industry in the organized sector, including those offering BPO and KPO services, are able to elude coverage. The ministry has proposed that the Employees Provident Fund and Miscellaneous Provisions Act, 1952, be amended to delete the schedule of industries covered under it. The Act should instead name specific industries that are exempt. "The first thing that employers challenge when they are hauled up for not making EPF contributions is the applicability of the Act on them," an official with the Employees Provident Fund Organization (EPFO) told ET. The negative list will help remove any ambiguity on that count, the official said. The proposal to amend the Act will be placed before the Central Board of Trustees at its meeting next week. The Central Board of Trustees is the top policy making body of the EPFO. It has representatives from both employer and employee organisations. At present, the EPF Act has a schedule of 186 industries. Although the government updates the list from time to time, it finds it difficult to keep pace with emerging industries. This gives new age industries, like BPOs and KPOs, a chance to argue that they are exempt. "We have to keep chasing BPOs, KPOs and IT industries. There is also unnecessary litigation," the official said. If the changes in the Act were approved, there would just be a small negative list of industries that the labour ministry may want to exclude from provident fund obligation. "Only those sectors that feature in the negative list can get exemption from their PF obligations," the official said. Some organisations avoid making PF payments as it allows them to make compensation packages appear more attractive with a bigger cash component. It also saves administrative hassle. While workers would welcome the initiative, some trade unions say it is not enough. The government should also do away with the ceiling that allows an enterprise with less than 10 employees to be exempt from the provisions of the Act. "There are employers, such as transporters and taxi operators, who may employ just one or two drivers. They too need to be covered under the Act," said Kashmir Singh Thakur of the Centre of Indian Trade Unions . He said just by removing the ceiling, crores of workers falling outside the ambit of EPF will be covered. |
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