Section 81: Continuing Offences and Daily Penalties

Overview

Section 81 of the Code on Social Security, 2020, doesn’t relate to a specific social security benefit like Provident Fund or ESI directly. Instead, it addresses the consequences of *ongoing* violations of any provision within the entire Code. This means it applies to defaults related to Provident Fund, Employees' State Insurance (ESI), gratuity, maternity benefits, building and other construction workers welfare, and any other obligation created under the Code. It’s a mechanism to ensure sustained compliance across all social security schemes.

Who is Covered?

• This section applies to all employers and establishments covered under the Code on Social Security, 2020. This includes those covered by existing laws like the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, the Employees’ State Insurance Act, 1948, and the Payment of Gratuity Act, 1972, as well as new establishments brought under the Code’s purview.
• Eligibility isn’t directly relevant to Section 81 itself; it concerns the underlying social security schemes. For example, an employee must meet the wage criteria for Provident Fund eligibility, but Section 81 applies to the employer’s *failure* to contribute if the employee *is* eligible.

Benefits and Contributions

• The benefits vary depending on the specific scheme (Provident Fund, ESI, gratuity, maternity benefit, etc.). These benefits are designed to provide social and economic security to employees.
• Contribution responsibilities are also scheme-specific. Generally, employers and employees both contribute to schemes like Provident Fund and ESI, while others like gratuity are solely the employer’s responsibility. The Code aims to streamline these contribution mechanisms.

Procedure and Compliance

Section 81 doesn’t define a procedure; it deals with the penalty for *not* following the procedures outlined in the Code for registration, contribution payment, return filing, or any other compliance requirement. Generally, compliance involves:

1. Registration: Employers must register under the applicable schemes.
2. Contribution Calculation: Correctly calculate contributions based on employee wages.
3. Contribution Payment: Deposit contributions within the prescribed timelines.
4. Return Filing: Submit regular returns detailing contributions and employee details.

Failure to adhere to these procedures can trigger the penalties outlined in Section 81.

Practical Examples

• Example 1: An employee, Ramesh, becomes eligible for Provident Fund after completing three months of service and earning a wage exceeding the prescribed limit. The employer is legally obligated to enroll Ramesh and start contributing.
• Example 2: A company, ABC Ltd., fails to deposit the Provident Fund contributions for its employees for two months. This is a continuing offence. The authorities may impose an initial penalty and a daily fine for each day the default continues after a notice is served, compelling ABC Ltd. to rectify the situation promptly.

Disclaimer

This article is for basic understanding of social security law and should not be treated as legal advice. Consult with a qualified legal professional for advice tailored to your specific situation.