Saswatabanerjee
Partner - Risk Management
AK CHANDOK
Epf & Esi Matters
Anand R V
Human Resources
+4 Others

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We are a small scale industry covered under ESI and PF. Our unit is 25 years old. We have been deducting PF @12% of Basic + DA all these years.
We are planning to start a 2nd unit in the same name wherein we would like to deduct 12% of basic + DA subject to a ceiling of Rs6500/ ( ie) Rs780 / max.
Will the PF dept object to this practice ,
advice
regards
Raghuvir

Thanks for your prompt reply Mr.Vyas,
Since the name of the company is same and PF registration code nos are also are same for both the units can the dept object to two different practices .
Thanks in advance
Regards
Raghuvir

Hi Raghuvir,
Being that the 2nd unit is in the same name, it will be considered as 1 company and PF wouldn't accept discrimination among the employees. All the more it is against the Law. You can bring the Rs.780/- across the company which is accepted by the PF department.

Thanks for your views Mr.Anand, Any other response to Mr.Anand’s view point . We want to be sure that we are within the purview of the law before we impliment this. Thanks Raghuvir
Hi,
If company name is same, company addresses will be differrent. In that, PF department will allot PF sub-code with original PF code number. For more information, you need to contact your nearest PF department.
Thanks,
Mounesh G

Dear All,

Please refer to the relevant provisions of the EPF and MP Act,1952.

All such employees, whose pay at the time he is otherwise entitled to become a member of the fund, exceeds Rs.6500/- per month are excluded employees. The employer is not required to make him member of the scheme statutorily. However, on joint request of both employer and the employee drawing pay more than Rs.6500/-, the concerned EPF authority may allow the membership of the scheme and employee's contribution may be made on more than Rs.6500/ per month.

Now in the situation given here, since the establishment registered with the EPFO remains the same, there is no need for seperate registration in case another unit is set up which is an integral part of the original establishment.

All new employees whose pay at the time of joining the establishment is upto Rs.6500/- per month will have to become member of the scheme compulsorily.Whereas, those getting more than Rs.6500/- per month, being excluded employees, may have to follow the relevant provision contained in para 26 of the scheme.

Mr.Dev and Mr.Vyas,
Thanks for your replies but my question has not been understood fully except by Mr.Anand. The question is
Can we follow the Rs6500/ ceiling for one unit and follow without ceiling for another unit . Both the units belong to the same company.
Thanks again
Raghuvir

Mr Vyas,
Unfortunately if employees have been getting pf 12% of basic + da without ceiling all these years it will not be possible to go back to ceiling of Rs6500 now as the employees will not accept lesser contribution.
The second unit isnew and under construction and we would like to implement the ceiling of Rs6500 here as all the employees are new.
My question is will the pf dept object to 2 different practices in the same company.
thanks again
raghuvir

My view in this regard is as follows-:
Where the employee is appointed as fresh below the salary of 6500/-, there is no problem,
Where the employee is appointed fresh but his salary is above 6500/-, you can restrict the contributions upto 6500/-in case he agrees for PF membership or you can treat him as an excluded employee, But , in case he is already a member of EPF by virtue of his previous employment, you have to continue PF contribution on higher salary.
In case ,you want to reduce and restrict upto statutory limit of 6500/-, you must seek permission of RPFC by giving reasons.
A K Chandok
RPFC (Retd.)
<link no longer exists - removed>

Dear Raghuvir,
The ceiling provided for coverage of employees under the Act and not for the units. It will have to be implemented in all the units uniformally. In fact it is for all the establishments coverable under the Act.


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