The trouble mounts for the Bengaluru-based ed-tech company Byju’s as it might face action over delayed provident fund (PF) payments by the EPFO (Employees’ Provident Fund Organisation), reported the Indian media on Monday (June 26). A report by Moneycontrol citing data from the EPFO claimed that the company’s PF contributions have been lagging for months now.
What did the report find?
The report by Moneycontrol, citing the data sourced from EPFO, said that the company has been making delayed PF payments since October, last year. Additionally, for some employees Byju’s made PF contributions for December only in June, said the report.
Similarly, several employees have reportedly accused the company of not depositing the PF from their salaries in their Employees Provident Fund (EPF) accounts.
The report also noted a lag of three to four months in payments citing the data. However, the company has since reportedly expedited PF payment contributions following another report by Moneycontrol, last week.
In the report, the media outlet claimed that employees’ PF passbooks were not showing contributions from November last year while their salary slips showed PF contribution entries.
The data also indicated that only around 10,000-13,000 employees received PF payments for January, February, and March, while a majority of them are still waiting for their PF payments for April and June, the report noted.
Indian law about PF contributions
Last year, in February, the Supreme Court ruled that an employer is required to cover damages if there is a delay in an employee’s PF contribution under the PF Act. The legislation requires the companies to make PF contributions before the 15th of next month and in case of any delays employees have the right to file a complaint with the EPFO against the employer.
The complaint would prompt the EPFO to initiate an enquiry against the employer, which in this case could be Byju’s, which could be asked to recover the damage amount for the late deposit. In some cases, the employees can even file a police complaint against their employers. However, before any action or penalty against the employer, they are given time and opportunity to present their case.
In 2016, the EPFO was probing the now-defunct Kingfisher Airlines for delaying its PF contribution to international workers and was later fined $885,240 (Rs 7.62 lakh) for non-compliance. A similar penalty could be issued by the EPFO for Byju’s, said the report by Moneycontrol, citing PF consultants, personal finance experts, and lawyers.
Has Byju’s responded to these allegations?
When asked about the allegations of non-payment by Moneycontrol, the company declined to comment. However, also in response to the media outlet’s queries, a Byju’s spokesperson said, “This is to confirm that there are no pending PF payments towards employees. There are no dues,” as quoted by Moneycontrol.
Meanwhile, some sources close to the company told Moneycontrol that it was a reflection issue and that the company has been timely making PF payments.
Byju’s board members quit, Deloitte resigns as auditors
This also comes days after media reports said that three board members of Byju’s – Peak XV Partners’ (previously known as Sequoia Capital India) GV Ravishankar, Prosus’ Russell Dreisenstock and Chan Zuckerberg Initiative’s Vivian Wu, quit.
Additionally, Deloitte, one of the world’s largest auditing firms which was supposed to audit Byju’s until 2025 also resigned with “immediate effect” citing “long-delayed” financial statements of the company for the year March 31, 2022.
(With inputs from agencies)
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