I am working as an hr executive. Our Salaries are paid through cash and cheque and My Boss doesn't want to open Salary account of employees. There is no deduction in our salary, i.e. No Pf, ESI etc.. All we get is the take home salary... So just want to know that what problems will employer face if all salaries are paid through salary account. Employer will be required to pay pf an esi if he opens a salary account for employees....If there is any way where employer won't face any problem in opening salary account of empoyees then please suggest......
From India, Delhi
Dear Member,
You have not mentioned whether the establishment in which you are working is covered under various labour laws viz.-EPF and ESI Act, 1948 or in Shops & Commercial Establishments Act ( of respective State). You have also not indicated the number of employees working in the establishment in which you are working.Therefore, it is not possible to submit any comments.
As mentioned by you, you are working as HR executive in the firm, and from the records you can see whether any deductions are being made towards EPF and ESI Contributions. The issue is whether the establishment in which you are working is coverable under above Acts ?.

From India, Noida
Salary account has got some features like zero balance, free NEFT transfer, free DDs (though limited), etc. It has got nothing to do with statutory compliances. pon
From India, Lucknow
Dear Neha,
Its nothing to do with deduction of any statutory compliance, you can open your employees salary account on zero balance but its depend on how many employees do you have in your organization? Bank would required to fulfill certain formalities like they might visit your organization and will ask you for certain documents which are necessary to submit and also what is the minimum pay scale.

From India, Pune
This is one of the clandestine method few employers adopt to deny benefits like PF/ESI/Bonus and other service related benefits. This type of methodology should be resisted by all means. The malafide intentions could easily be read, pardon me if I misunderstood the conditions. The boss is adopting this method thinking that when salary a/cs are opened they may aid the employees to prove their longevity of employment and nos. But just merely by opening a/cs the employer is not going to face problems in other words it may only smoothen the operations of disbursement of salary but incidentally it will aid employees as a proof. Legally he may pay either by cash or by cheques or thro' a/cs. However reg. IT for > 20K payments by cash he has to disclose in Tax audit returns.
From India, Bangalore
Thanks Seniors.....Employee Strength is 95-100.... Its not covered under ESI & PF....If we open Salary Account, then do we have to follow Pf & Esi.....
From India, Delhi
Hi Neha, Salary account does not have any connection with statutory compliance. Once your strength exceeds 20, you need to cover them under PF/ESI. Pon, Chennai
From India, Lucknow
As PON said once the employees' strength is 10 & 20 you have to automatically cover them under EPF & ESI. There is no question of "not covered". If you have not covered them so far it is illegal and your firm/directors or who is responsible is liable for prosecution including imprisonment. If you think "so far nothing happened why should it not continue" is false and misplaced. To avoid jail and penalty with interest you should abide by law. Sorry if I sound candid and rude, I don't want to mince words here. I don't deny people get over with this unscathed for a long time (with or without vitamin 'B') but every day won't be the same.
All the best Neha.

From India, Bangalore

If you are knowledgeable about any fact, resource or experience related to this topic - please add your views using the reply box below. For articles and copyrighted material please only cite the original source link. Each contribution will make this page a resource useful for everyone.

Please Login To Add Reply

About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2021 CiteHR.Comô

All Material Copyright And Trademarks Posted Held By Respective Owners.
Panel Selection For Threads Are Automated - Members Notified Via CiteMailer Server