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

Thread Started by #sure0605

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.
8th July 2014 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.
8th July 2014 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.
8th July 2014 From India, Chennai

Attached Files
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File Type: pdf RPFC Circular on EPF Contribution - Excess contribution.pdf (27.8 KB, 3859 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/-.
8th July 2014 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.
8th July 2014 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
8th July 2014 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.
8th July 2014 From India, Chennai

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File Type: pdf SC Judgement - EPF-Excess of statutorylimit-Marathwada gramin bank.pdf (127.1 KB, 784 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.
8th July 2014 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.
8th July 2014 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.
8th July 2014 From India, Noida
Dear All
I agree with Harsha's comment,
What the Act says the employer share is maximum amount of Rs.780 (6500 x 12%). Where in this issued raised for seeking opinion, whether Employer can reduce the amount and pay Rs.780/- as Employer share.
Here, the EPFO bifurcates the contribution of Employer and Employee. If Employer pays more than Rs.780/-, the excess amount will be deposited into Employees share.
Hence, in this particular case, the person raised this issue has to confirm that who the EPFO authorities bifurcated the amount paid by his management.
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9th July 2014 From India, Kurnool
Dear sir, It is correctly said that EPFO dated 27/05/2014 not to force the employers to contribute over and above the statutory wage ceiling in respective of their employees.
11th July 2014 From India, Chennai
Yes. It is not reducing the benefit. It is going according to the PF rules. It can be done by giving prior intimation to the employees. Nothing wrong.
16th July 2014 From India, Hyderabad
Respected sir,
am joining fresh employee in our company is my basic + da Rs.16000/- permonth is compulsory pay the epf contribution? is not pls enclosed any one circular copy
21st May 2018 From India, Chennai
regarding pf/eps contribution of employer:When employee is contribution say 12% of his basic, say 50000, his amount of 6000(50000x12%) is credited to his pf account correctly.. As per the Act, the employer need to contribute equal amount. is it not?. Then in that case employer has to contribute rs.6000(out of this 1250(15000 maximum amount eligible for eps calculation x 8.33% ) will be marked for EPS and balance Rs.4750(6000-1250) . Please confirm whether this is correct or not?
point no.2 : is it possible for the employer to contribute in the above case only Rs,1800(15000x12%- 1250 for eps and 550 for pf of employer share) and not Rs.6000 eventhough the employee is contributing 6000. pls confirm what is the specific rule under which if there is any provision(please attach a copy of the same). Thanks
3rd July 2018 From India, Mumbai
Hi
Referring the circular shared by Pragnaa HR above, the max statutory salary limit on which contribution has to be made is 15000( or actual drawn salary whichever is less). I would suggest the following things to avoid any administrative hassle on monthly basis and to save your skin at the time of inspection.
I do not agree with making employee contribution on amount 20000 and employer contribution on amount 15000. Employer has to make an equivalent contribution, though it may be legally allowed.
Instead Limit both(Employer`s and Employee`s) contribution on Rs. 15000( i.e. Rs. 1800+Rs. 1800).
If employee wants to make more contribution, let him do it by way of a voluntary contribution which can be 88% of the basic. You need to keep a document(a request letter) in this regard from employee stating the rate of voluntary contribution. But please ensure that this voluntary contribution, though voluntary in nature, can be changed(increase/decreased) only in the month of March(being the first month of the year for pf purpose). You can start it any time during the year.
I agree with Mr. Harsh Kumar above said, please inform the respective RPFC about your decision or discuss with them for their views, and then only take the decision. Especially when you want to do it now after having contributed on salary above statutory limit in past.
Please share if any of you have taken decision and it is approved by pf authority by now.
Regards
Puran
20th November 2018 From India, New Delhi
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