Under the Employees' Provident Funds and Miscellaneous Provisions Act,

Under the Employees’ Provident Funds and Miscellaneous Provisions Act, the Central Government may authorize an employee to maintain a Provident Fund Account in relation to the establishment, upon an application made by the employer and majority of such establishment’s employees provided that the number of persons employed in that establishment is not less than

100

200

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This question was previously asked in

UPSC CISF-AC-EXE – 2020

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The correct answer is A.

The question refers to the Central Government authorizing an establishment to maintain its own Provident Fund Account upon application by the employer and majority of employees. This scenario typically applies to establishments that are mandatorily covered under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act) and seek exemption from the Government Scheme to maintain their own provident fund trust (under Section 17(1A)). The EPF Act mandatorily applies to establishments employing 20 or more persons (Section 1(3)). An establishment must be covered by the Act to apply for such an exemption. Therefore, the number of persons employed in that establishment must be “not less than” the threshold for mandatory coverage, which is 20.

Section 1(3)(a) states the Act applies to factories engaged in scheduled industries employing 20 or more persons. Section 1(3)(b) states the Act applies to any other establishment employing 20 or more persons notified by the Central Government. Section 1(5) (formerly 1(4)) allows voluntary coverage for establishments with less than 20 employees, but the question’s condition “not less than” points towards the mandatory coverage threshold. Section 17 deals with exemptions, where the Central Government can authorize an establishment to maintain its own PF if it provides benefits not less favourable than the statutory scheme. This exemption is available to establishments to which the Act applies, i.e., generally those with 20 or more employees.

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