The finance ministry has approved a new amnesty scheme for Employee Provident Fund defaulters. The scheme, to be taken up by the Cabinet shortly, proposes to allow companies with outstandings to deposit them with the Employee Provident Fund Organisation within a specified time-frame, in return for certain concessions.

The scheme proposes that establishments, which pay their outstanding dues along with interest within one month of the date of notification of the amnesty scheme, be exempted from the payment of penalty.

If the establishments pay their dues in the second month, they will be required to pay up to 50 per cent of their penalty amount, officials said. Outstanding dues to the EPF amount to almost Rs 1,500 crore (Rs 15 billion) and Rs 600 crore (Rs 6 billion) is the outstanding on account of non-levied interest and penalties.

The EPFO has launched a drive to recover the dues and encourage compliance among the defaulters.

As part of the drive, it has also decided to award organisations that are prompt with PF payments. It has constituted 'best employer' awards -- to be given to establishments that have no defaults.

While Telco was given the award for the oldest best complying establishment, Andhra Pradesh State Road Transport Corporation was awarded for being the best complying exempted establishment. Christian Medical College, Vellore got the award for the best progressive employer.

A performance gap audit, conducted in 2001, showed that 59 per cent of the 183,000 establishments covered under the EPF scheme were not complying.