PMRPY Scheme 2019

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A Storm after a Calm – Employers’ cry - with reference to PMRPY scheme

A Storm after a Calm – Employers’ cry - with reference to PMRPY scheme The happy-going Managements of the Industrial Establishments are suddenly getting shock waves for no fault of theirs. Yes… This is regarding the incentive scheme announced for the establishments generating employment under the Pradhan Mantri Rozgar Protsahan Yojana ( PMRPY ). After having allowed the managements to avail the incentive based on the scheme for a period of three years, now, it looks like, the Employees’ Provident Fund Organisation has shifted moods. They are now in the spree of issuing notices demanding the return of incentive quoting the reason for which the managements of the establishments are not at all responsible.

The PMRPY scheme has been designed to incentivise employers for generation of new employment, where Government of India will be paying the 8.33% of EPS (Employees’ Pension Scheme) contribution of the employer for the new employment.

The scheme is meant for the employees earning wages less than Rs 15000/pm under semi-skilled and unskilled categories. And the new employee is one who has not been working in an EPFO-registered establishment on a regular basis prior to 1st April 2016. It has also been very clearly mentioned in the scheme that this aspect will be determined by checking that he or she was allotted a new Aadhaar-seeded Universal Account Number ( UAN ) on after 1/4/2016. For the purpose of this scheme, the UANs must be Aadhaarseeded and verified.

A Storm after a Calm – Employers’ cry - with reference to PMRPY scheme It is further mentioned at the time of introduction of the scheme itself that UAN seeded with Aadhaar number would be validated in UIDAI / EPFO data base for verification and de-duplication. And after the due verification, the system will compute the amount due for that establishment against the verified new employee. So, the verification effectively can be done only by the Employees’ Provident Fund Organisation. This has been the process defined and practiced since the time the scheme got introduced in 2016. Of course, the employers do not have the mechanism to check this out even now and they have to just rely on the declaration made by the new entrant at the time of recruitment as to his / her previous employment and as to his / her coverage under PF. Even if the registered new employee changes his job within a period of 3 years, the new employer can continue to avail the benefit in respect of him.

And the quantum of benefits got increased from 8.33% to 12% with effect from 1/4/2018.

As originally announced, the registration of new employees under the scheme was stopped with 31st March 2019. Simultaneously, the portal has also been upgraded constantly. During March 2019, one could see a new menu ‘Member Service Details’ which provides for previous employment details of a member.

A Storm after a Calm – Employers’ cry - with reference to PMRPY scheme This feature was not available earlier or at least it was not visible for the employers. On 25/6/2019, one could find one more additional feature in the form of “PMRPY recovery challans” posted under the menu “PaymentsECR/ Return filing” where one could see the details of the proposed recovery of the incentive already granted together with interest and damages. The feature displays a foot note in red font which says “recovery amount under PMRPY against ineligible employees is pending. To avail PMRPY benefit, please first deposit the recovery amount”.

This is actually the trigger. This communication through the portal is like a bolt from the blues for the affected employers. They are at a loss to know that in what way they are being made responsible and penalized. It is the portal, which is under the control of EPFO, which does all the verification. It is the EPFO which has undertaken the responsibility for de-duplication. It is the system which computes the amount to be passed to the employers after due verification. It is not possible for the employers concerned to verify the previous employment details of a new employee otherwise. In fact, when the PMRPY scheme got introduced, there was no mechanism in the portal to ascertain the previous employment details of a new employee.

A Storm after a Calm – Employers’ cry - with reference to PMRPY scheme It is apparent that even the PF department could not ascertain the details of the previous employment of a person. It is a new feature which was developed much later. Employer too did not have the infrastructure support in the portal to verify such duplication before submission of new employee data except confirming the data from Form-11 which is collected from the employees. Because of the new improvised version of the portal, now, it has become possible to get to know about the earlier employment of a person and consequently the truth about the person’s coverage under PF. It is the department which has undertaken to take care of the de-duplication process.

The eligibility of the employer for the incentive is decided only after the validation by the PF department as per the scheme. It is on this basis Employers have been availing the benefits since the scheme got introduced.

Suddenly, sending a message that Employer are not entitled to the benefits and hence Employer have to pay back the principal received so far along with interest and damages is highly unjust and unfair.

Before making the recovery, the law requires the parties concerned to follow the ‘principles of natural justice. Here, the employers are not given the opportunity to explain their case. The foot note, referred supra, further asks the employers to pay the amount demanded immediately as otherwise the benefits for the subsequent months would be stopped. This is nothing but harassment.

A Storm after a Calm – Employers’ cry - with reference to PMRPY scheme It is also noticed that some of the employees (in respect of whom the department makes a demand for recovery) though had previous employment but still have joined only after 1/4/2016 which the scheme considers as ‘new employees’. In case of some employees, the duplication has happened since they have just made ‘name correction’ and some employees did not have previous employment at all. Why recovery is demanded in respect of these employees remains unknown. All these are very painful. We naturally tend to question the authenticity of the demand for recovery and tend to question the attitude of the people who handle it.

When a scheme is brought out with a laudable idea, if it is not implemented with the same import, it just waters down the whole exercise. Issuing notices under PMRPY scheme on employers for recovery is a big slap on their faces. Organisations have started feeling that they are made scape-goats.

The employers seem to be the soft target now-a-days. Whatever said and done, they are supporting the nation’s economy; they are supporting the citizens by providing them employment and they are supporting the society at large through their products / services. Should such a community be meted out this kind of a treatment? Is it fair?

Mathivnan mathivanan@aparajitha.com

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