Labour Minister Unveils “Vishwas” Scheme to End EPF Litigation

In a significant reform move, Labour and Employment Minister Dr. Mansukh Mandaviya has launched the Vishwas Scheme aimed at curbing protracted litigations under the Employees’ Provident Fund (EPF) & Miscellaneous Provisions Act. Unveiled during the 238th meeting of the Central Board of Trustees (CBT) of EPFO in New Delhi, this scheme is part of a broader push to streamline EPF processes, rationalize penal damages, and enhance member convenience.

What Is the Vishwas Scheme?

• The Vishwas Scheme is designed to reduce litigation by rationalizing penal damages imposed for delayed remittances of EPF dues.
• Instead of multiple, often steep penalties leading to disputes and court cases, this scheme offers a simplified, uniform penal rate and covers ongoing, pending, and future cases under specified categories.

Key Features

Uniform Penal Rate: 1% per month for most delayed payments

Graded Lower Rates

• 0.25% per month for defaults up to 2 months
• 0.50% per month for defaults up to 4 months

Coverage

• Pending litigation under Section 14B
• Unpaid penal damage orders
• Pre-adjudication defaults

Legal Impact: Compliant cases will see litigation abated or withdrawn

Duration: Initially active for 6 months, with an option for extension

Liberalised Partial Withdrawal Rules

Alongside Vishwas, EPFO has introduced a major overhaul in withdrawal regulations to increase flexibility and ease of access for subscribers.

New Withdrawal Framework

Categories Simplified:

• Essential Needs – for education, illness, marriage
• Housing – for construction, purchase, or loan repayment
• Special Circumstances – including calamity, unemployment

Withdrawal Limit: Up to 100% of eligible EPF balance (employee + employer share)

Service Requirement: Reduced to 12 months across all categories

Relaxed Frequency Caps

• Education – up to 10 times
• Marriage – up to 5 times

Minimum Corpus Retention: 25% of contributions to remain in account for retirement safety

No Disclosure Needed: For special circumstances, reason need not be specified

Digital Reforms and Process Upgrades

To enhance administrative efficiency, the ministry also launched several digital initiatives, including,

• Re-engineered Return Filing Module
• User Management Module
• Upgraded e-Office
• SPARROW System for APAR Management

These upgrades aim to streamline operations, reduce delays, and improve user experience within the EPFO system.

Static Facts

• Scheme Name: Vishwas Scheme
• Launched by: Dr. Mansukh Mandaviya, Union Labour & Employment Minister
• Occasion: 238th meeting of EPFO’s Central Board of Trustees
• Aim: To curb litigation under EPF Act by rationalizing penal damages