Section 79: Repeat Offences and Enhanced Penalties

Overview

Section 79 of the Code on Social Security, 2020, doesn’t relate to a specific social security benefit like Provident Fund or ESI directly. Instead, it’s a procedural section that applies across all benefits and schemes covered under the Code. This includes Provident Fund, Employees’ State Insurance (ESI), gratuity, maternity benefits, building and other construction workers welfare, and schemes for unorganized workers. It focuses on the consequences of repeatedly violating the provisions of the Code related to these benefits.

Who is Covered?

• This section applies to employers and any person (including company directors, managers, or anyone responsible for compliance) who is found to be in violation of the Code’s provisions.
• The applicability extends to all establishments and employees covered under the various social security schemes consolidated by the Code. Eligibility for the underlying benefits (Provident Fund, ESI, etc.) will depend on the specific scheme’s rules regarding length of service, wage ceilings, and other criteria.

Benefits and Contributions

Section 79 itself doesn’t define benefits or contributions. It deals with the penalties for failing to properly administer the benefits and contributions as defined by the specific schemes under the Code. For example, failing to remit Provident Fund contributions, delaying ESI payments, or denying maternity benefits are all actions that could lead to penalties, and those penalties are enhanced under Section 79 if the employer is a repeat offender.

Procedure and Compliance

Compliance with the Code involves registering with relevant authorities, regularly contributing to social security schemes, maintaining accurate records, and filing returns as required. Section 79 comes into play after a violation of these compliance procedures has been established. If an employer is found guilty of an offence and then commits a similar offence again, Section 79 allows for a more severe penalty than would be applied for a first-time offence. The specific procedures for determining violations and imposing penalties are outlined in other sections of the Code and related rules.

Practical Examples

• Example 1: An employer is initially fined for late submission of ESI contributions. If they continue to submit contributions late repeatedly, Section 79 would allow the authorities to impose a significantly higher fine or even imprisonment.
• Example 2: A company is found to be illegally deducting Provident Fund contributions from employees but not remitting them to the EPFO. If this practice continues after a warning and initial penalty, Section 79 will trigger enhanced penalties, potentially including imprisonment for responsible individuals.

Disclaimer

This article is for basic understanding of the Code on Social Security, 2020, and Section 79 specifically. It should not be treated as legal advice. Consult with a qualified legal professional for advice tailored to your specific situation.