Over 22,000 workplaces in Sri Lanka are registered only with the Employees’ Trust Fund (ETF), avoiding parallel registration with the Employees’ Provident Fund (EPF) in a bid to reduce employer contribution costs, Labour Department sources reveal.
By the end of last year, these businesses had collectively contributed Rs. 505 million to the ETF.
Employers are required to contribute 3% of an employee’s salary to the ETF, with no contribution required from employees.
However, many of these employers have allegedly chosen not to register with the EPF, which mandates a combined 20% contribution—8% from the employee and 12% from the employer, making it a more financially burdensome obligation for companies.
The National Audit Office has raised concerns over this gap in compliance and has called on the EPF to take steps to identify and register employers who have defaulted on EPF payments.
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