BYJU’S In More Trouble Over Delayed PF Payments

Edtech decacorn BYJU’S has delayed provident fund (PF) payments of employees for almost all months starting October last year. This could lead the edtech giant to face action, including a fine, from the Employee Provident Fund Organisation (EPFO) as delaying PF payments is a violation of the PF Act.

The edtech giant is said to be making PF payments at a delay of almost three to four months, according to EPFO data accessed by Inc42. In some cases, the delay was as much as six months after the wage month ended, the data showed.

Further, BYJU’S only credited data for a small chunk of its employees over the past few days, with a majority of its 45,000+ workforce still awaiting PF contributions from the edtech giant. 

According to the EPFO data, first highlighted by Moneycontrol, BYJU’S paid PF contribution from December 2022 for 14,839 employees on June 19, the same day it paid PF for between 11,000 and 14,000 employees from January through March.

It has also paid PF contribution for 31 employees for May 2023 on June 19 itself. Interestingly, all these payments, amounting to nearly INR 19.5 Cr, were made between 7:10 PM and 8:20 PM on June 19.

To be sure, the edtech giant had made payments towards the respective wage months earlier as well. For instance, BYJU’S had paid PF contributions for January 2023 in February and May as well, though the majority of its January payments happened on June 19.

However, a BYJU’S spokesperson said, “This is to confirm that there are no pending PF payments towards employees. There are no dues.” To be sure, sources close to the edtech giant cited by Moneycontrol noted that the company was facing a reflection issue in the PF contributions made.

Under the PF Act, companies need to make PF contributions before the 15th of next month and employees can file a complaint with the EPFO against the company if the PF is delayed. Further, according to a Supreme Court ruling in February 2022, an employer is needed to cover damages if an employee’s PF contribution is delayed. 

Under the PF act, employers defaulting on contributions are liable to pay damages under Section 14B and interest under Section 7Q of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 on the amount due. This could lead to the EPFO imposing a fine on the company, to recover the damages.

If an action from the EPFO is forthcoming, it would add to a growing list of problems at India’s most valuable startup.

Last week was especially turbulent for BYJU’S as three board members – GV Ravishankar of Peak XV Partners, Vivian Wu of Chan Zuckerberg Initiative and Rusel Dreisenstock of Prosus – stepped down.

Around the same time, Deloitte resigned as the statutory auditor of the edtech giant with immediate effect. BYJU’S has since hired BDO as its auditor and has assured its shareholders that it would file its FY22 financials by September at a delay of 18 months.

At the same time, it remains in a legal tussle with the lenders of its $1.2 Bn Term Loan B (TLB), who have sued BYJU’S Alpha – a wholly-owned subsidiary – in Delaware. The edtech company has also sued one of its investors in the New York Supreme Court, missing out on a $40 Mn payment towards the TLB in the process.