Enforcement of Non-payment of contribution
Defaulters and Penalties
If the contributions are not received by the VNPF by the end of the following month after the deduction month, the employer is liable to pay a surcharge (late payment fee) of 5% of the contribution amount due. This applies for every month or part of a month that the contribution is made late.
For example, the employer has received the January 2018 Contribution Schedule from VNPF in January 2018. It is due to be paid on or before the end of February 28, 2018 (one month from the end of January 2018). The total amount of the contribution is Vt5, 000.
The employer did not pay on the due date but made the payment of contribution on 28 June 2018. The employer is therefore, four months late and is liable to pay for surcharges as a penalty fee for late payment of VNPF contributions.
The surcharge would be Vt.1, 000 and is calculated as follows: 5% (penalty rate) X Vt5, 000 (contribution) = Vt. 250 (penalty fee per month) Vt250 X 4 months late = Vt.1, 000 is the total surcharge due.
The employer must pay the surcharges within 21 days from the date of the surcharge notice. Failure to pay surcharges within the prescribed period is a punishable offence under the VNPF Act. Where an employer fails to pay contributions that are due with the mistaken belief that the contributions are not payable, and the Fund accepts this as an error, these contributions must be paid to the Fund within a month from the time the error was discovered. The Fund will treat these contributions as due from the time the error was discovered and no penalty will be imposed, unless the employer fails to pay on the due date.
Where the failure to pay contributions on time is shown to be due to the misdirection of the Board, the liability to pay surcharges may be waived.
Offences under the VNPF Act
The following are offences under the VNPF act and applies to any employer who:
Penalties under the VNPF Act
An employer who commits any or all of the offences stated above, and is found guilty, shall be liable to a penalty of an amount not exceeding Vt.100, 000 or to a prison term not exceeding 6 months, or a combination of both.
An employer who deducts from the salary of an employee a sum greater than that permitted to be deducted as a contribution, or having made the deduction and then fails to pay to the Fund, and is found guilty, can be fined an amount not exceeding Vt.200,000 or to a term in prison not exceeding 1 year, or a combination of both.
Appointment of inspectors
The Board shall appoint inspectors who shall have and exercise all powers, duties and functions as follows:
All contributions payable to the Fund may be recoverable as a civil debt. Proceedings for the recovery as a civil debt of any contribution may be brought at any time within 6 years from the date when the contribution becomes due. Surcharge is a contribution recoverable as a civil debt.
Evidence in Proceedings
In any criminal or civil proceedings, a copy of any entry in the records of the Fund duly certified under the hand of the General Manager shall be prima facie evidence of such entry having been made and of the truth of the content thereof.
A certificate under the hand of the General Manager that there is no entry shall be prima facie evidence that no entry has been made.
- Knowingly makes a false statement.
- Furnishes or causes, or knowingly allows to be produced or furnished, any document which he knows to be false in substance.
- Fails to apply for registration within the prescribed time frame.
- Fails to pay to the Fund in any month any amount, which he/she is liable for in respect to any Employee.
- Obstructs any member, officer, employee, agent, adviser, or consultant of the Fund in the discharge of their duties and functions.
- Fails to pay any contribution or surcharges (penalties) within the prescribed period.
- Enter any place/premises where persons are believed to be engaged as employees.
- Examine and ascertain whether the provisions of the VNPF Act or orders or regulations made are or have been complied with in the premises or place.
- Require the production of any document that an employer is required to keep under the provisions of the VNPF Act, it's orders and regulations.These documents would relate to regulations concerning employment, labor or employees. In addition, the inspector may request further documents to determine whether the provisions of the VNPF Act, orders or regulations made are being or have been complied with.
- The inspector may request a copy or extract from a document(s). This request would be in the form of a notice in writing sent by registered post to the employer's address. A date and time would be specified as to when the document(s) would be required by the inspector.
- The inspector may question persons when there is reason to believe that information useful to the inquiry can be provided. If the person questioned is required to attend a hearing, he or she will be notified in writing where and when this will take place. This would be done under the VNPF Act or any order or regulation.