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CS Professional · Labour Laws and Practice · Law of Wages

Neha's employer, Bharat Logistics Ltd, deducted Rs 3,000 from her wages for her provident fund but failed to deposit it in the fund account. The fund later demands the amount from Neha. What is the legal position under the Code?

Neha is not responsible. Under the Code, where an employer deducts from wages but fails to deposit the amount in the required fund or account, the employee cannot be held liable for that default of the employer.

  1. ANeha is jointly liable with the employer for the default
  2. BNeha is liable only if she knew of the non-deposit
  3. CNeha must repay the amount to the employer first
  4. DNeha is not held responsible for the employer's default of not depositing the deductionCorrect

Explanation

Where a deduction is made but not deposited in the trust, Government fund or other account as required by law, the employee is not to be held responsible for the employer's default. Knowledge or joint liability is not a condition.

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