The Coronavirus pandemic has brought a tremendous financial loss to businesses worldwide. Indian corporates are also struggling to manage their cash flow crunch right now. One method they have used as a resort is by halting/postponing the deposits of PF money for their employees.
Nearly 322,000 companies paid their dues in April, which is 38% less than February, when the pandemic did not actually impact the economy yet. This step was a precautionary measure by employers to maintain as much cash flow as possible before the lockdown itself. If you are/were a PF account holder by your employer, the below information can lifesaving for you.
Here's what you will learn
The Stop-Gap Tactic
What employers want to achieve from stopping the due PF account payments is more money in hand to run the business. This does not necessarily mean that you lost your money. If you are still employed and are getting your salary nearly on time even now, it is okay to wait. What you can do to be sure that your money is credited wherever due is by getting in touch with your accounts department or HR for confirmation.
The Probation Clause
If you joined your company just a few months back, you may currently be in the probation period. The government also has a fixed mandate for the probation period of 6 months regarding Provident Funds deposit. Your employer declares that they will deposit an agreed amount into your PF account every month from the beginning of the tenure.
But, the government legally binds the employer only if the employee completes the probation period. So, the employers usually deposit the money altogether at the end of the probation when the employee is confirmed. If you are either fired or voluntarily resign from your company before the probation ends, no money will reach your hands.
Financial experts at Economic Times suggest that there may be an even bigger dip in the coming months if lockdown is not lifted. Businesses are already struggling to retain the monopoly enough to sustain themselves.
On the other hand, more employees are withdrawing money from their PF accounts due to the relaxation provided by the government. Even those who have not lost their job or quit are withdrawing up to 75% of their balance from the account. The only reason is to accumulate as much while they can.
Check Your PF Balance
As the government has provided relaxation to both unemployed and employed persons with full and upto 75% of balance withdrawal, it may be time for you to check your balance too. Why? Because, this is not similar to withdrawing from your savings account. Do you have your UAN number? Do you know how to do it online? To be able to take action when needed, these details should be available at your disposal right now.
Ask Your Employer
If you have access to your PF account and find out that the employer is not depositing money right now, it is time to act fast. Get hold of the finance and accounts department personnel regarding when and how it will be transferred. Get a written statement of assurance if possible. The law binds every employer to pay the dues regarding the PF, so you can also send a legal notice to your employer through an advocate. We can always hope for the best to come next, and prepare for the worst that may fall upon us.