The total no. of employees are 60, now the provisions of Employees' Provident Fund & Miscellaneous Provisions Act are applicable. But, the provisions Employees' State Insurance Act, 1948 are not applicable if the above 10 employees (including the employee of contractor and other agency who have deputed any employee at your establishment and drawing Rs. 15,000/- of less than).
But, the ESI Corporation is going to implement/applicablity the ESI on the etablishment where 10 or more employees are employed.
I saw an advice given by you and hence am looking up to you to get a clarification on the applicability of the PF Act.
We are an IT Infrastructure Management Company located at Kochi, Kerala. We have an employee strength of exactly 20 as on date. We have not so far got covered under PF Act.
As per the facilities/policy relaxations provided to Micro, Small and Medium Establishments by the Govt of India, (Laghu-udyog.com - Labour Policies for Small Scale Industries in India), the Scope of the Act Excludes establishments employing 50 or more persons or 20 or more persons but less than 50 persons, until the expiry of three years in the case of the former, and five years in the case of the former, and five years in the case of the latter, from the date of setting up of establishment. Having been incorporated as a Private Limited Company on 30 May 2007, we seem to be required to seek coverage only after 30 May 2012.
Please clarify the validity of the above, as the PF authorities at Kochi do not agree to this and say no such provision exisits in the Act
Dear Mr. Ramachandran
As you are a IT Infrastructure Management Company located at Kochi, Kerala and having employee strength of exactly 20 as on date including director of the company and other employees who are deputed through contractor and all will be counted for the purpose of coverage of your establishment. According to me your company is coverable under the Act.
The Section 16 of Employees' Provident Fund & Miscellenous Provions Act, 1952 states about the relaxation of the establishment which are Registered under the Cooperative Socieites Act, 1912, or under any other law for the time being in force in any State relating to copperative societies, employeeing less than fifty persons and working without the adi of pwoer;
The reference mentioned (Laghu-udyog.com - Labour Policies for Small Scale Industries in India) is not correct.
In view of the above and currect position of the law, your company is coverable with immediate effect. You are requested to kindly submit application for registration with the Employees' Provident Fund Organiation.
If you need any other clarification, you are most welcome.
Dear Mr. Mukesh, Thanks for sharing your valuable knowledge on PF. Its very useful & documentation for me Thanks a lot. Mahesh
Dear Mr.Mukesh/all concerned,
Please let me know if iam wrong in understanding PF from what i have learned in this long thread.
Above 20 Employers in an organization - PF is compulsory
If their Salary ie.(Basic + DA) <= Rs. 6500, then employer and employee contribution is 12% of Basic +DA.
If the salary is above 6500, Pf calculations can be restricted until 6500 and Rs.780 from both employer and employee side. Please let me know is this right??
Also for those who have their salary above Rs.6500, can they opt out of PF. If yes, How??
You are fully understood about the provident fund contribution. Yes, the provisions of EPF & MP Act is applicable on the organistion where 20 or more employees are employed. The salary for the purposes of provident fund contribution is only Basic not DA. It is mandatory for the management to contribute the contribution of provident fund on the salary who are drawing Rs. 6,500/- or less then. If any of the employee is drawing salary above Rs. 6,500/- it is upto the management what they want to extent the benefit of the Act to those employees or not.
While appreciating your valuable opinions on several queries from fellow cite-hrians relating to PF/ESI,I seek your reasoned comments on the following practical problem ,my organisation is facing:
--One contractor having obtained independent PF Code absconded from the work site without depositing the PF contributions of his labourers for several months.The management(PE) continued to pay wages to the labourers for some months deducting the PF dues in absence of the contractor afterwhich the contract of the contractor was terminated. The management sought direction from the RPFC under which code the PF dues of the workers for the past period is to be deposited,if PE wants to deposit the same,but the RPFC sat over the matter for months together and did neither take any action against the contractor nor communicated to PE under which code the PF dues for past months will be deposited by PE and as to how past PF dues will be assessed in the absence of contractor’s wages sheets(for the period ,the wages were paid by him). One day the union/labourers went on wildcat strike demanding instant deposit of PF dues by P.E. for the entire period (both for the period wages paid by contractor as well as by PE).To diffuse the situation,the management(PE) signed a MOD with the workers’union to deposit the PF dues of the workers after jointly discussing with RPFC.After hearing both parties,the RPFC initiated action under Sec-7A to determine the PF dues issuing notices to the contractor & the P.E.
Now the RPFC is insisting the P.E. to deposit the PF dues of the workers in respect of wages ,which the contractor has paid and the wages which PE has paid to workers,without taking action to recover the PF dues from the contractor by way of freezing his bank account ,initiating certificate proceeding etc.The P.E. has now deposited the PF dues for the months ,the wages for which it has paid wages to the workers.Can the P.E. now plead before the RPFC on the next date of hearing not to insist it to deposit PF dues for the past months,the wages for which period , the contractor has paid to the workers and the same should be recovered from the absconding contractor.
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