The Employees' Provident Fund Organisation (EPFO) has introduced 'VISHWAS, 2026', a one-time dispute resolution scheme aimed at enabling employers to settle long-pending cases related to damages and penalties through a simplified, technology-driven process. The initiative is intended to encourage voluntary compliance, reduce litigation, and improve the efficiency of the country's social security administration.
The Ministry of Labour and Employment said the scheme came into force on June 29, 2026, and will remain open for a period of six months, giving eligible employers a limited window to resolve outstanding disputes under relaxed terms.
According to the ministry, the scheme covers disputes concerning the levy of damages under Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, as well as penalties imposed under Section 128 of the Code on Social Security, 2020.
The ministry said the initiative has been designed to strike a balance between facilitating compliance by employers and safeguarding the interests of employees by ensuring timely settlement of dues.
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According to an official statement, "VISHWAS, 2026 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 scheme provides relief across four broad categories of pending cases, making it applicable to a wide range of employers. These include disputes currently pending before judicial forums, cases where recovery proceedings are pending or have been partly completed, matters in which show-cause notices have been issued but final orders are yet to be passed, and cases where notices have not yet been issued by the authorities.
By covering disputes at different stages of the legal and administrative process, EPFO aims to provide employers with a comprehensive opportunity to resolve outstanding matters without prolonged litigation.
As part of the scheme, EPFO will recalculate damages and penalties for eligible defaults that occurred before June 14, 2024, at substantially reduced rates. The revised rates have been structured according to the duration of the default in order to encourage quicker settlement of cases.
For defaults of up to two months, damages will be recalculated at 0.25 per cent per month. For defaults extending beyond two months but less than four months, the applicable rate will be 0.50 per cent per month. In cases where the default exceeds four months, damages will be recalculated at 1 per cent per month, significantly lower than the rates applicable under normal provisions.
The ministry clarified that employers seeking relief under the scheme must first pay the entire interest amount payable under the relevant statutory provisions before submitting an application for settlement. This condition has been made mandatory to ensure that employees' provident fund contributions and associated interest remain fully protected.
In addition, applicants will be required to submit an undertaking confirming that they will not pursue any further appeal or legal proceedings in relation to disputes that are settled under the scheme. This provision is intended to ensure finality of the settlement and reduce the burden of prolonged litigation on both employers and the EPFO.
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