Sr. Manager Hr/admin
Bk Mohanty
Hr Assistant
Korgaonkar K A
+1 Other

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Greetings of the Day!!!
i have been working in a company for last one year, where we used to calculate PF contribution like this:
Employee Salary=10000
Employee contribution(12%)=1200/-
Employer contribution(13.61%)=1361/-
now they have adopted system like this:
Employee Salary=10000
Employee contribution(12%)=1200/-
Employer contribution(13.61%) @ 6500=780/-
is it right to make such changes in EPF without giving information to the employees/workers.
Kindly revert to me as soon as possible.
With regards,
Shams Tabrez

Hi Shams Tabrez
As per PF Act you shall restrict either ER Contribution for 6500/- ie 780/- or both EE & ER contribution to 6500/-. what ever the contribution you are making above 6500/- will be part of VPF.
As suddenly they are reducing only ER contribution it is better to intimate to the employees. Else later on there may be confusions and mis-understanding between the company & employees.

Thanks for your quick response. after giving information to the employees, can we take any legal action on that matter, if yes. how to do it. regards, shams
If I am not wrong , law says, minimum contribution from an employer towards pf should be Rs. 780/- which your company is contributing. As your company has not communicated to their employees about sudden change in the deductions/contribution which is not correct but my opinion would be not to go legally against the company.
Company HR may communicate the sudden change to their employees after consultation with the management.

Go through as per below which applicable:-
1) There is no binding for PF deduction as per law if PF Salary more than 6500.00 at the time of joining.
2) If Employees joined to service on low PF salary i.e. less than 6500.00 then . As per law minimum deduction 780/- on 6500.00 should done.
3) If PF salary more than 6500.00 then go through VPF if employees are intresting to contribute more beyond the limit .
4) For VPF contribution, pl. first complete the written procedure form employees for prevent the legal comlication in future.
Maher B.B.

It is true that as per the statute the contribution for both employer and employee could be on Rs 6500/-(Basic + DA +VDA). In excess of this if the employer desires to deduct from their employees on entire salary , would be treated as VPF in which case written consent needs to be obtained from the employee concerned.
But isuue is, if the deduction was effected on entire salary earlier ie, 1200/- @10000/-, subsequent decision in reducing the contributory amount in respect of the same employee could attract legal opinion which needs to be checked . However for fresh recruitees the revised system could hold good. Further I suggest that an intimation to this effect could also be given to the PF authority to be at a safer side.
bk mohanty
Cypress Management Associates

As per the law, the orgn. can contribute the amount basic of upto Rs.6500/- only. If it is more that that it is not objectionable by the dept. But Employee can object to deduct the EPF on basic of 6500 or exceeding 6500 rs. per month.

At the time of joining if the basic+DA+VDA is less then 6500/- ,the contribution would be accordingly @ 12% from both employee and employer. Subsequently if such salary components exceeds 6500/-, the employer might restrict their contribution on 6500/- while the employee if so desires, might agree in writing to contribute on entire such salary components to be termed as VPF in excess of 6500/-
bk mohanty

Dear Govind Singh ji,
Greetings of the day to you as well all viewers.
In the current thread, the question is whether once EPS account is settled between the age 50 and 58, can an employee became a member again of EPS. I have replied to it. I have full confidence in my reply.

Dear All, My humble request to you all to kindly ignore my above posting. Highly obliged

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