Seeking Legal Opinion on PF Compliance Issue
I head a 15-member team management consulting organization in Chennai. We are enrolled with PF and have been remitting the same regularly. In one of the recent audits, the PF inspector made a recommendation to collect the PF on the full salary of the employees and not just on the basic salary alone. Additionally, he also raised a demand to pay the PF on the differential salary for the last 3 years, covering the employees who left the organization over the last 3 years. Almost all the employees have withdrawn their PF amounts and closed the accounts. We have disputed the decision taken by the inspector and have been attending the hearings over the last few months at the PF office.
We would like to know if any lawyers with expertise in labor laws are available on the Cite forum. If so, we would be interested in seeking their legal opinion on the matter.
Early responses are appreciated.
Regards,
Rama Venugopal
[Email Removed For Privacy Reasons]
From India, Chennai
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1I head a 15-member team management consulting organization in Chennai. We are enrolled with PF and have been remitting the same regularly. In one of the recent audits, the PF inspector made a recommendation to collect the PF on the full salary of the employees and not just on the basic salary alone. Additionally, he also raised a demand to pay the PF on the differential salary for the last 3 years, covering the employees who left the organization over the last 3 years. Almost all the employees have withdrawn their PF amounts and closed the accounts. We have disputed the decision taken by the inspector and have been attending the hearings over the last few months at the PF office.
We would like to know if any lawyers with expertise in labor laws are available on the Cite forum. If so, we would be interested in seeking their legal opinion on the matter.
Early responses are appreciated.
Regards,
Rama Venugopal
[Email Removed For Privacy Reasons]
From India, Chennai
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Clarification on Full Salary and EPF Contributions
Please clarify what the full salary is. If you have been deducting it from the basic salary, which is Rs. 6500 or above, then the EPF has wrongly demanded it because, according to the Supreme Court verdict in Maratwada Gramin Bank's case, the EPFO has no right to demand contributions on salaries exceeding Rs. 6500.
If the basic salary is less than Rs. 6500 and you have been contributing accordingly, the decision on whether other components of the salary qualify for PF contribution is still pending. The Apex court is yet to provide a final ruling on this matter. Therefore, the issue is currently on hold.
Regards,
Madhu.T.K
From India, Kannur
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Please clarify what the full salary is. If you have been deducting it from the basic salary, which is Rs. 6500 or above, then the EPF has wrongly demanded it because, according to the Supreme Court verdict in Maratwada Gramin Bank's case, the EPFO has no right to demand contributions on salaries exceeding Rs. 6500.
If the basic salary is less than Rs. 6500 and you have been contributing accordingly, the decision on whether other components of the salary qualify for PF contribution is still pending. The Apex court is yet to provide a final ruling on this matter. Therefore, the issue is currently on hold.
Regards,
Madhu.T.K
From India, Kannur
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EPF-Circular-da ted-23-May-2011 -Splitting-of-M inimum-Wages-fo r-the-Purpose-o f-PF-Contributi on-Not.pdf