No more penalties for tech errors: EPFO introduces demand draft option for employers

In a significant relief for employers, the Employees' Provident Fund Organisation (EPFO) has announced a new provision allowing a one-time payment of old EPF dues via demand draft. This move marks a departure from the usual online route, where employers submit an Electronic Challan-cum-Return (ECR) and pay dues through internet banking.

The decision comes in response to recurring technical glitches in the ECR filing process that have made it difficult for employers to deposit dues on time. These delays have often attracted penalties and caused dissatisfaction among employees due to delayed crediting of PF contributions.

Acknowledging the gravity of the situation, the EPFO issued a circular directing its field offices to accept one-time payments through demand draft in cases where technical issues have prevented timely compliance.

The EPFO has clarified that this is not a blanket change in payment methodology but a relief mechanism applicable only for past dues. Employers who choose this route must declare that it is a one-time payment and not a substitute for future payments, which must continue through the online ECR system.

The Officer-in-Charge of the respective EPFO office must verify the legitimacy of the request and ensure the demand draft is accepted only after confirming that the employer won’t repeat the process.

To ensure transparency and maintain record integrity, employers are required to submit an undertaking and a list of affected employees whose dues are being settled. This will act as a safeguard in case of future audits or disputes.

In addition, employers must still file their returns along with the payment, ensuring that employee PF records remain up-to-date and accurate.

While the EPFO has made this offline provision available under exceptional circumstances, it continues to advocate for the use of the online ECR and internet banking systems for regular and upcoming payments. The organisation emphasises that digital compliance is crucial for efficiency, transparency, and timely benefit disbursal to employees.