EPFO Launches Vishwas Scheme to Settle PF Penalty Disputes

The EPFO Vishwas Scheme has been launched to simplify compliance and reduce legal disputes. The scheme focuses on resolving long-pending cases related to penal damages imposed for delayed payments of provident fund (PF) dues.

Why was the EPFO Vishwas Scheme Needed?

For years, employers have faced heavy penalties and lengthy litigation over late PF remittances. As of May 2025, the EPFO reported outstanding penal damages worth ₹2,406 crore and over 6,000 pending cases across various courts and tribunals. Another 21,000 potential cases are still awaiting action under EPFO’s e-proceedings portal.

How Will the EPFO Vishwas Scheme Benefit Employers?

Under the Employees’ Provident Funds (EPF) Act, delayed PF payments attract penal damages. Earlier, the penalty rates ranged between 5% and 25% per annum, and for delays before 2008, they were even higher (17% to 37% per annum). These steep rates led to widespread disputes and legal battles, burdening both employers and the judicial system.

To address this, EPFO has rationalised the penalty structure under the Vishwas Scheme. The new rates are much lower and fairer, encouraging employers to settle old dues without fear of excessive penalties.

Key Features of the EPFO Vishwas Scheme

The scheme covers a wide range of cases, including ongoing litigation before the Central Government Industrial Tribunals (CGITs), High Courts, and the Supreme Court under Section 14B of the EPF Act. It also applies to finalised but unpaid orders and pre-adjudication cases where a notice has been issued but the final order is still pending.

How Will the EPFO Vishwas Scheme Benefit its Members?

The Vishwas Scheme is expected to reduce litigation, lower legal costs, and encourage timely PF compliance. For EPF members, this means faster recovery of dues, quicker reinvestment, and potentially better returns on their provident fund savings.

Read more: EPFO Eases 'Part Withdrawal' Rules, Allowing Up to 100% of EPF Balance.

Conclusion

The Vishwas Scheme marks a significant reform by the EPFO to promote trust, transparency, and ease of doing business. By reducing penalties and offering a fair resolution framework, the scheme encourages employers to clear old disputes and ensures that employees’ PF benefits are protected and paid without delay.  

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