EPF Registration: Benefits, Procedure & Challenges

The EPF stands for Employees’ Provident Fund. It is a valuable financial tool that benefits both employees and employers. EPF registration not only satisfies the company’s legal requirement but is also a smart business move. It helps companies maintain legal compliance. On the other hand, an employee can also enjoy a lot of benefits from EPF. It ensures the financial independence of the employee after their retirement. In this article, we will learn about the benefits of EPF registration, its procedure and more in detail.

What is the Employees’ Provident Fund (EPF)?

EPF registration enrolls employees in the Employees’ Provident Fund (EPF) scheme. This scheme helps employees build retirement savings through regular contributions from both the employer and employee.

The government introduced the EPF scheme in 1952 under the Employees’ Provident Funds and Miscellaneous Provisions Act. The Employees’ Provident Fund Organization (EPFO) oversees its operations. Headquartered in New Delhi, EPFO functions under the Ministry of Labor and Employment, Government of India.

Benefits of EPF registration

A company can enjoy the below-listed benefits once they get their EPF registered:

• Stronger Legal Compliance and lower risk

Post registration under the EPF scheme, a company is bound to follow the rules and laws of the Employees Provident Funds and Miscellaneous Provision Act of 1952.  When a company complies with the rule, it can easily avoid penalties, legal disputes, and operational restrictions. On the other hand, employers will also get timely updates about any regulatory changes

• Better Security and transparency

When the company registers for EPF, the system encrypts all the data of the employer, which in turn reduces the risk of fraud. With the online portal, employers can easily track their contribution, application status, and compliance report. When a company registers their EPF with transparent transaction records, it helps them simply audit and maintain financial assessments.

• Efficient Employee Fund Management

Employers can easily handle their contributions through the EPFO portal.   With automatic calculations, employers can easily reduce their errors. On the other hand employees can receive timely deposits which in turn ensures their financial security. In order to track their funds and transfers, employees get a Universal Account Number, also known as UAN.

• Tax Benefits for Employers and Employees

When a company contributes to EPF, it also qualifies for tax deductions under the Income Tax Act of 1961. Employers will be able to claim deductions on their contributions. While the employees can easily enjoy tax-free interest and withdrawals under specific conditions

• Retirement and Social Security for Employees 

Under the EPF scheme, employees get financial security even after retirement. The savings and the interest that they accumulated over the year become enough to meet their post-requirement needs. It also acts as a financial support system in case of disability or unforeseen circumstances.

• Better Employee Retention and Job Satisfaction

When an employer registers for EPF benefits, they not only attract skilled professionals but also increase employee retention.  Employees always prefer a company where they will get financial security and also enjoy long-term benefits. This, in turn, leads to higher job satisfaction and lower turnover rates.

• Access to Additional Benefits and Schemes

Once an employee becomes a member of EPF, they can access various schemes such as EPS (Employee Pension Scheme) and EDLI (Employees’ Deposit Linked Insurance Scheme). These schemes provide pensions and insurance benefits, which further give extra financial protection to employees and their families.

• Easy Fund Withdrawals for Emergencies

Employees can withdraw from their EPF during emergencies such as medical treatments, home purchases, or education. Partial withdrawals are allowed under specific conditions, such as a minimum service period or proof of necessity. The withdrawal limit varies based on the purpose of the withdrawal. It also ensures that funds are available while it maintains long-term savings. For medical needs, employees can withdraw an amount based on hospital expenses. On the other hand, home-related withdrawals depend on construction or purchase costs. Educational withdrawals are permitted for children’s higher studies. These rules balance immediate financial needs with future security.

Step-by-step process for filing your EPF Registration:

Any company can register their EPF online with the steps mentioned below:

Step 1: Check the website

To start the process of EPF registration, first, the applicant needs to visit the EPFO unified portal. In this portal, the applicant needs to navigate to the “establishment sign in” section. If someone is logging in for the first time, they need to create a new login ID and password.

Step 2: Sign up on the Shram Suvidha portal

Once the user logs into the portal, they need to register themselves in the Shram Suvidha portal as well. Once the applicant logs in, they are bound to follow the multiple labor laws linked to that portal.

Step 3: Logging in and applying for EPF registration

After logging in to the portal, the employer needs to navigate to the “registration for EPF-ESIC” option. Once logged in, the applicant needs to click on the “apply for new registration” option in order to start the process. 

Step 4: Choosing the Right EPF Act

Once the applicant starts the process, they must choose the correct act that applies to their category. The applicant will have two options: “Employees State Insurance Act of 1948” and “Employees Provident Fund and Miscellaneous Provision Act of 1952”.The applicant needs to select the first option, “Employees Provident Fund and Miscellaneous Provision Act, 1952”.

Step 5: Filling in the details

Once the applicant chooses the correct act, they need to provide all the accurate details about their company. The details include the name of the establishment, PAN, Date of Incorporation and official address. Companies should also mention the type of their business, that is, if it is Private Limited, Partnership or LLP. If the applicant gives wrong or misleading information, it may cause an issue in approval of the application. Hence, while filling in the details, the applicant should provide accurate information in order to avoid delay or rejection in the registration process.

Step 6: Providing employee and their wage details

After filling in the details about their company, the applicant needs to fill in accurate details about their workforce and their wages. The applicant should keep in mind to fill in accurate information. If there are any discrepancies in the details of employment, the EPFO might object to the application.

Step 7: Uploading documents

After the employer fills in all the details, they need to submit proper documents in order to validate their businesses and the information of their employee. Before submission, the applicant should ensure that all the documents and data are valid and match the government records. Failing to submit correct and accurate documents might result in the rejection or delay of the application.

Step 8: Use DSC for registration

Before the applicant submits all the documents, they need to sign it digitally with their Digital Signature Certificate (DSC). When an applicant verifies the documents with their electronic signature, they protect themselves from fraud, and it also ensures the authenticity of the registration.

Step 9: Review and submit the application

Prior to submission, the employer must do a thorough check of the application to ensure accuracy. Post verification, the applicant needs to submit their application. Once the form is submitted, the applicant needs to wait for the approval of the EPFO. The applicant can check the status of their application from the EPFO portal.

Step 10: EPFO Verification Process

After submitting the EPFO, I will conduct a thorough check of all the documents. If the department finds any discrepancies in the application, they will notify the applicant via e-mail. The email will include the issues in the information and will also ask for clarifications. To avoid this step, the applicant needs to upload accurate information during the filing process.

Step 11: Issuance of the EPF registration certificate

Post-verification, the EPFO will issue a registration certificate and a unique EPF code. Once the employer receives the code, they can start providing their employee a Universal Account Number (UAN). Employees can access and manage their EPF accounts with their Universal Account Number (UAN).

Documents required for filing EPF registration:

Below is a list of documents the employer that is the applicant needs to submit depending on their type of entity (but not limited to).

Proprietorship firm

• Applicant name
• Pan card of the Proprietor
• Proof of Identity of the proprietor
• Proof of residence of the Proprietor
• Complete details of the applicant, along with their residential address and telephone number

Partnership Firms/ LLP/ Company

• Name of the partnership firm or LLP or company
• Certificate of Registration firm(applicable to partnership firm)
• An Incorporation Certificate in case of LLP or company
• Partnership deed (for partnership firms of LLP)
• Identity proof of partners
• List of all partners with contact information along with their proof of residence(applicable for Partnership firm or LLP)
• List of all directors with contact information (applicable for company)

Society and Trust

• Registering the organization
• Certificate of Incorporation
• MOA and byelaws
• Proof of identification
• Complete details on president and other members
• PAN card

Common Documents

• First sale bill.
• First purchase bill of raw material and machinery.
• GST registration Certificate, if registered under GST.
• Name of the bankers, address of the bank.
• Record of a monthly strength of the number of employees.
• Register of salary and wages, all vouchers, all balance sheets from day one to current date of provisional coverage.
• Date of joining of employees, father's name and date of birth.
• Salary and PF Statement.
• Cross-cancelled cheque.

Eligibility Criteria for EPF Registration

The company must meet the below-mentioned criteria to apply for their EPF registration certificate:

• Mandatory Criteria for Registration

Listed below is a list of the criteria that an entity should meet to be eligible for EPF registration:

• Number of Employees: If 20 or more people work for a company, they become eligible to register under the Employees’ Provident Fund and Miscellaneous Provisions Act of 1952.
• Establishment type: If any factory, private company, school, hospital or NGO employs 20 or more people, they are eligible for the EPF scheme.
• Wage consideration: If a company pays a basic salary of Rs 15,000 per month, they can apply for the EPF registration.
• Interstate Operations: If a business operates in different states with different registrations for different states, they can apply for EPF registration

• Voluntary Registration

• If a business has less than 20 employees, they can voluntarily register for EPF.
• If any business registers voluntarily, they must comply with all the EPF rules and laws. It should also contribute to the EPF fund like any other registered establishment.
• Government and Special Category Organizations
• Government undertakings, co-operative societies and specified notified establishments should also register under the EPF regardless of their employment count.
• If any startup or new business plans to expand their business and cross the 20-employee mark soon, they should also register under this scheme.

• Common challenges in EPF registration and their solutions:

• When a company files their EPF registration, it can face a lot of problems throughout the process. Listed below are the common challenges that a company faces along with their solutions:

• Error in Document Submission

• When an employer applies for their EPF registration, they often upload incorrect or incomplete documents. This causes a delay in the application process. The application might get rejected because of incorrect or incomplete information, which in turn causes issues in compliance.
• Solutions
• Below are how companies can easily solve this issue:
• Cross Checking: During the document uploading process, the employer should cross-check all the documents. They need to ensure the accuracy of the documents.
• Matching government record: The employer should do a thorough check of the documents to ensure that they match with the official records. If the employer’s documents fail to match the record, their EPF registration application might be delayed or rejected.
• Verification: Once the applicant files in their details in the registration portal, they should verify that their documents follow the prescribed format

• Mismatched Employer Details:

If an employer fills in wrong details about their company, such as wrong PAN, GST or business, their document will not match the government records. In such scenarios, the application of EPF registration might get rejected or delayed

Solutions

When employers face these kinds of issues, they can follow the below-mentioned solutions to solve the problem.

1. Providing the exact details: When an employer files their application, they should ensure that their documents exactly match the record of the Income Tax Department as well as the GST portal
2. Double-Checking: Prior to submission, the applicant must double-check all the information in order to ensure that the information is accurate and matches the prescribed format. 
3. Updating the records: In cases where the details of the company have changed before filing for registration, the employer must update the details present in the government record.

• Issue in Digital Signature

Employers need to upload their Digital Signature certificate in order to authenticate their application digitally. But sometimes, employers face issues when their Digital Signature Certificate has expired or is incomplete. They can also face problems if their certificate is not registered correctly. In such a scenario, the application of the employer gets delayed or rejected.

Solutions:

Below are a few of the solutions that a company can opt for to avoid such issues:

1. Valid DSC: In order to authorize and authenticate the EPF registration application, the employer should ensure that their DSC is valid and linked to the EPFO portal.
2. Government Approved: While uploading the DSC, the employer should check the class. They should ensure that the certificate is a government-approved class 3 certificate to authenticate their application.
3. Update or renew DSC: Before starting the registration process, the applicant should ensure that their DSC is updated or renewed.

• Portal and login Issues

Employers sometimes face issues when they access the EPFO Unified Portal.  It can be because of various reasons like server downtime, login errors, or incorrect credentials.

Solutions

An employer can face this problem at any time. In order to solve these problems, a few of the solutions are listed below.

1. Latest Browser and fast Internet: The employer needs to use the latest browser when they are logging into the portal. They should also check their internet connection.
2. Reset Login Credentials: If the problem persists, the employer should try to reset their login credentials.
3. Using the portal during non-peak hours: Even if the issue continues, the employer can try to access the portal during the non-peak hours of the day.

5. Delay in Approval

If the applicant, that is, the employer, has uploaded any incorrect or incomplete information, the EPFO department might take some extra time to approve the application.

Solutions

In order to solve this problem, the employer can opt to solve the problem.

1. Checking the status: After applying, the employer should regularly check the status of their application in the EPFO portal.
2. Respond promptly: In case of delay, the most common reason is incorrect or incomplete information. In such cases, the EPFO notifies the employer via mail. If the EPFO asks for any additional or missing documents, the employer should reply to the mail with the missing documents as soon as possible

Applying for EPF registration with Online Legal India:

EPF registration is important for businesses in order to comply with labour laws. It ensures financial security for employees. A registered business makes timely contributions to retirement funds, pensions, savings, and insurance of its employees. If a business fails to register itself, it might face penalties and legal issues and lose the trust of its employees. Employees may also miss important financial benefits, which in turn might affect their future security.

The registration process involves detailed paperwork and specific requirements. This might be hectic, or some people might not have the time to register for EPF themselves. In such cases, Online Legal India is one of the best platforms because of their expert assistance. With their team, the process will become hassle-free. They will ensure that the application is done quickly and without any errors. Other than that, their platform also offers complete support that helps to reduce delays and prevent fraud. An employer can easily avail the PF-ESIC filing service from Online Legal India from anywhere.