Employers get 6 months to settle EPF damages disputes under new scheme

Ziraat Times Team Report

New Delhi, July 17: The Employees’ Provident Fund Organisation (EPFO) has launched “VISHWAS, 2026,” a one-time dispute resolution scheme aimed at facilitating the amicable settlement of disputes related to damages and penalties levied under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and the Code on Social Security, 2020.

According to the Ministry of Labour and Employment, the scheme came into force on June 29, 2026, following its notification under the EPF Scheme, 2026, and will remain operational for six months.

The initiative seeks to promote voluntary compliance, reduce litigation and expedite the resolution of long-pending disputes while safeguarding employees’ interests. EPFO said the scheme offers employers an opportunity to settle eligible cases through a transparent, fully digital and time-bound process.

The scheme covers four categories of cases, including disputes currently under challenge before judicial forums, cases where recovery of final penalty or damages orders is pending or partially completed, matters where notices have been issued but final orders are yet to be passed, and cases where notices have not yet been issued.

Under VISHWAS, 2026, damages and penalties for defaults occurring before June 14, 2024, will be recalculated at reduced rates. Defaults of up to two months will attract damages at 0.25 per cent per month, defaults between two and less than four months at 0.50 per cent per month, and defaults exceeding four months at 1 per cent per month.

To avail of the scheme, employers must first clear the entire interest liability payable under the relevant provisions of the EPF Act or the Social Security Code. They must also undertake not to pursue further appeals in respect of disputes settled under the scheme.

EPFO said the scheme includes provisions for adjustment of amounts already paid towards penalties or damages and regulation of statutory pre-deposits made for appeals. However, cases where penalties or damages have already been fully recovered, those involving fraud, misappropriation or deliberate falsification of records, and cases where statutory interest remains unpaid are not eligible.

Applications will be submitted online through the EPFO Employer Portal using a Digital Signature Certificate or e-Sign facility. The organisation has also issued operational guidelines to its field offices and is setting up dedicated VISHWAS Cells across zonal, regional and district offices to assist employers and ensure timely processing of applications.

EPFO said regular monitoring at the zonal and headquarters levels would be undertaken to ensure effective implementation of the scheme and urged eligible employers to utilise the one-time opportunity to resolve pending disputes and regularise compliance.