Harsh Kumar Mehta
Consultant In Labour Laws/hr
Ravi5554
Asst.manager -hr
Pragnaa HR Compliance Services
Pragnaa Shree Venture India Pvt. Ltd
+4 Others

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Dear Experts,
I recently joined a private limited company as a HR Executive. This company is paying 12% of basic towards PF contribution. I told the management that the company can restrict the PF Contribution to Rupees 780/ month, which will save money to the company. The management has asked me to start the procedures.
My doubts are,
1. Can a company stop the 12% contribution and start contributing 780 rupees in the middle of the operations.
2. If yes, can this be done to all the employees or only to the newly joining employees.
3. And what is the procedure to do this.
Note: The strength of this company is 90+. The company been started in 2010.

From India, Chennai
Hi,
Hi,
As per latest amendment Employer can not reduce wages as per Provident fund act.
No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his
liability
for the payment of any contribution to the Fund or the Insurance
Fund or any charges under this Act or the Scheme or the Insurance
Scheme reduce whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance Scheme applies or
the
total quantum of benefits in the nature of old age pension,
gratuity, provident fund or life insurance to which the employee is entitled
under the terms of his employment, express or implied.

From India, Mumbai
Hi, Yes, you can do this now, for all employees. We have attached the relevant circular for your immediate reference. In case, you are looking for any professional support, please write to us.
From India, Chennai

Attached Files
File Type: pdf RPFC Circular on EPF Contribution - Excess contribution.pdf (27.8 KB, 3946 views)

Hi,
Pragana Hr,
Please read the notification what it says, that says no one to force employer to contribute beyond the ceiling limit, but question is can we stop contributing over the ceiling between the operation, for this you need to read new amendments in EPF, so you need to read my post clearly.
Please Refer PF section 12
But in case, employer is currently deducting PF on higher than prescribe limit of Rs 6500/- and depositing the same to RPFC, in that case, employer can reduce and limit it to Rs 6500/-.

From India, Mumbai
Hi Aditya,
Please be noted that the question was not asked to stop the entire contributions, they wanted to reduce the contribution for the over and above ceiling (Rs. 6500/-). hence we suggested the possibilities. I hope, it is clear now.

From India, Chennai
Hi,
But in case, employer is currently deducting PF on higher than prescribe limit of Rs 6500/- and depositing the same to RPFC, in that case, employer can reduce and limit it to Rs 6500/-.
employer can restrict his contribution upto ceiling 6500/- but employees contribution over the limit then employer can not reduce the limit.......
Hope this may clear

From India, Mumbai
It can be, there is a supreme court judgement in Marathwada Gramin Bank case. Please refer the attached judgement, The aforesaid circular was issued on basis of this case only.
From India, Chennai

Attached Files
File Type: pdf SC Judgement - EPF-Excess of statutorylimit-Marathwada gramin bank.pdf (127.1 KB, 793 views)

HI, Yes you are right, but when employee is entitled under the terms of his employment, express or implied that can not be reduce.
From India, Mumbai
Hi,
I need EPF act clause and section that says that, in any period time employer can reduce the employee contribution.
I have seen your notification but i want to know under in which section that says that employer can reduce employee contribution at any time.

From India, Mumbai
Sir,
1. It is clearly mentioned in the circular of EPFO dated 27/05/2014,not to force the employers to contribute over and above the statutory wage ceiling in respect of their employees. Therefore, in my opinion, the employers who are contributing over and above the wage ceiling can reduce their part of contribution as per above circular of EPFO.
2. However, I will suggest to the person who initiated this thread to please seek prior approval from the authorised officer of their appropriate EPFO office indicating therein the circular of EPFO Hqrs. as mentioned above. The prior approval will definitely avoid any risk of levy of interest and damages in case of any other opinion of the officer concerned.

From India, Noida

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