According to the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, employees should be provided with Provident Fund as soon as the number of employees exceeds 19. Once an employer obtains a special code number by making an application to the local RPFC, the employer is required to pay at the rate of 12% of the salary of each employee and also to deduct equal amount from each employee and remit the same to Local RPFC every month.
Employers to whom the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 applies, have a statutory liability to subscribe to Employee's Deposit Linked Insurance (EDLI) Scheme, 1976 to provide for the benefit of Life Insurance to all their employees.
Under the scheme as amended with effect from 24th June,2000 the insurance benefit is equal to the average balance to the credit of the deceased employee in the Provident Fund during the last 12 months, provided that where such balance exceeds Rs.35,000, insurance cover would be equal to Rs.35,000 plus 25% of the amount in excess of Rs.35,000 subject to a maximum of Rs.60,000. Thus if the length of service is not adequate and/ or the salary is low the average balance may be substantially less and such the benefit to the employee's family is either inadequate or non-existent.
J. B. BODA can offer support to such employers by arranging for EDLI insurance from insurers of the client's choice.