Section 77: False Statements and Falsification of Records

Overview

Section 77 of the Code on Social Security, 2020 addresses a critical aspect of all social security schemes covered under the Code – ensuring the accuracy of information provided to authorities. This section doesn’t deal with a *specific* benefit like Provident Fund or ESI directly, but rather safeguards the integrity of *all* benefits administered under the Code, including Provident Fund, Employees’ State Insurance (ESI), gratuity, maternity benefits, and others. Accurate records are essential for workers to receive the benefits they are entitled to. False information undermines the entire system.

Who is Covered?

• This section applies broadly to employers, managers, contractors, and any person who is responsible for submitting returns, maintaining records, or providing information related to social security schemes to the relevant authorities. This includes individuals directly involved in payroll, HR, and compliance.
• There are no specific employee eligibility conditions mentioned within Section 77 itself. It focuses on the responsibilities of those submitting information *about* employees, not the employees themselves. Eligibility for specific benefits (like PF or ESI) is determined by the individual scheme’s rules.

Benefits and Contributions

• The benefits affected by non-compliance with Section 77 are those provided under the various schemes covered by the Code on Social Security. These include financial benefits like Provident Fund, medical benefits through ESI, gratuity payments, maternity benefits, and other social security provisions.
• Contribution responsibilities (employer, employee, and government) remain as defined by the specific scheme. Section 77 doesn’t alter those responsibilities, but it ensures those contributions are accurately reported and applied.

Procedure and Compliance

Compliance with Section 77 requires meticulous record-keeping and honest reporting. Here’s a simplified breakdown:

1. Maintain Accurate Records: Keep detailed and accurate registers and records as required by the Code and its associated rules for each social security scheme.
2. Truthful Returns: When submitting returns or providing data to authorities (e.g., PF Commissioner, ESI Corporation), ensure all information is complete, correct, and not misleading.
3. Avoid Manipulation: Do not manipulate wage figures, understate the number of employees, or conceal any material facts that could affect a worker’s benefits.
4. Prompt Rectification: If errors are discovered, promptly rectify them and inform the relevant authorities.

Practical Examples

• Example 1: An employee, Ramesh, works for a company covered under the Provident Fund scheme. The company accurately reports Ramesh’s wages and contributions to the PF authorities. As a result, Ramesh receives his PF contributions and is eligible for benefits like a pension upon retirement.
• Example 2: A company, ABC Ltd., intentionally underreports the wages of its employees to reduce its Provident Fund contribution liability. This results in lower PF contributions for the employees and a reduction in their future benefits. ABC Ltd. is in violation of Section 77 and could face fines and imprisonment.

Disclaimer

This article is for basic understanding of social security law and should not be treated as legal advice. For specific legal guidance, please consult with a qualified advocate.