EPFO launches “VISHWAS 2026” with slashed penalty rates, simplified process to settle disputes

The Ministry also stated that applicants will have to give an undertaking that no further appeal shall be pursued in respect of the dispute settled under the scheme | Photo Credit: Kesavan A N 1612@Chennai

To make social security administration more efficient and minimise litigation, the Employees’ Provident Fund Organisation (EPFO) has launched “VISHWAS, 2026” — a one-time grievance redressal initiative for amicably settling outstanding disputes regarding levied damages and penalties through a simplified user-friendly digital process. 

The scheme, notified on June 29, will remain operational for six months. The new scheme dramatically reduces these penalty rates down to a range of 0.25 per cent to 1.00 per cent per month for older defaults to encourage employers to clear their backlogs.

Penalty rates for defaults pertaining to the period prior to June 14, 2024 is 0.25 per cent per month for defaults up to two months, 0.50 per cent per month for defaults from two to less than four months, and 1.00 per cent per month for defaults exceeding four months, the Ministry of Labour and Employment said in a statement on Friday. These concessional rates are intended to encourage employers to resolve pending disputes expeditiously.

Four broad categories of cases will be entertained under the new scheme. They are: cases where orders for penalty/damages are under challenge before a judicial forum; final damages/penalty orders where recovery is pending or only partly made, including Recovery Certificate (RRC) cases; cases where notices have been issued but final orders for damages/penalty are yet to be passed; and cases where notices for penalty/damages are yet to be issued, the Ministry informed.

To avail the benefits of the scheme, employers are required to ensure that the entire interest payable under Section 7Q of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 or Section 127 of the Code on Social Security, 2020, as applicable, has been fully remitted before submitting an application, the statement read.

The Ministry also stated that applicants will have to give an undertaking that no further appeal shall be pursued in respect of the dispute settled under the scheme.

The scheme has been introduced with the objective of promoting voluntary compliance, reducing litigation, and enabling speedy resolution of long-pending disputes relating to penalty/damages while safeguarding the interests of employees, the Ministry explained. The scheme provides employers with an opportunity to settle eligible cases through a transparent, fully digital and time-bound process.

According to the Ministry, EPFO has issued detailed operational guidelines to all its Zonal, Regional and District Offices to facilitate smooth implementation of the scheme. Dedicated VISHWAS Cells are being established across field offices to assist employers, process applications expeditiously and ensure timely disposal. Regular monitoring at Zonal and Head Office levels will be undertaken to ensure effective implementation of the Scheme, as per the Ministry.

Published on July 17, 2026