PF Exemption For Employers - CiteHR
Saswatabanerjee
Partner - Risk Management
Apex Management
Labour Laws Consultants
Korgaonkar K A
Ba,llb,mpm,dir&pm,dll&lw,d.cyber
+2 Others

Cite.Co is a repository of information created by your industry peers and experienced seniors sharing their experience and insights.
Join Us and help by adding your inputs. Contributions From Other Members Follow Below...
Hi,
I took over family business 2007 which had 3 employees. After rennovation d 3 old emplyees left and hence hired 2 new. Because of lack of knowledge I missed to pay PF for employees. Entire amount was paid to employees. Can I be covered under any exemption to avoid non-payment of pf.
please advise.
Community Prime Sponsor
Talentedge.com "Interactive Anywhere Learning". Executive courses from top reputed institutes like IIM, XLRI, MICA.
Dear Brij.Agrwl,
The information given by you is insufficient to answer your query.
Kindly provide below given information:
1. Date of leaving the services by old 3 employees and whether they were covered under PF.
2. Last PF remittance, month and year; &
3. Date of joining of 2 new employees with their salary.
Hi,
Old employees left at Nov 2007 and they were covered under PF.
Last PF remittance was May 2007.
There were intermediate other employees, for couple of months and then 2 permanent employees since Mar 2008.
Dear Brij.Agrwl,

Thanks for providing the details which help me to reply your query as under:

1. You have not made the remittance from June 2007 to November 2007 in respect of left employees. You need to do it now.

2. You said that there were intermediate other employees, for couple of months and then 2 permanent employees since Mar 2008. Please note that you are liable to pay PF in respect of an employee even he is engaged on a single day also. Exception to this, he should be an 'excluded employee' within the meaning under the Act. Onus lies on you to prove that the employee is an 'excluded employee'.

You need to maintain the record of salary paid to all the employees month wise, work out your liability and pay it. The record of salary paid should match with the figures in your balance sheets.

Now PF department is online. You need to register your establishment for e-sewa portal. Then only you can generate the challans and make the remittance.

You may require help in this regards from a person like me. You seems to be from Mumbai. You can meet me with prior appointment.
How can I prove that employees are excluded? What do I do for current employees? How much penalty I am incure? I am UP.
Dear Brij.Agrwl,
As I said, you need a person like me to handle this task. You are advised to find out any PF consultant locally who can help you out in all respects.
To my earlier reply, I would like to add as under:
Even there is no employee contributing PF during any particular month, you need to pay Rs. 7/- in such month.
You will have to pay damages / interest on late payments.
As regards to excluded employees, please do research on this site, you may find posts by me in this regards, if not deleted by the site administrators.
The first point I would like to understand :
You have 3 employees. Then why are you registered under PF act ?
The minimum requirement is 20 employees. Did you have 20 or more employees at any time ?
How did you take over the business ?
What is the constitution of the business ?
What is the starting salary of the new employees who have joined ? (Basic + da)
I am not sure why we were paying PF.. father says the advocate wanted to ensure a client for his permanent income for filing PF for us.
Can we stop paying on the ground that PF does not apply on out size of business..
we are in movie exhibition..
I took over means.. because my father fell sudden sick for long.. I started to manage it all..
salary of new employees is ~7000 each..
Once you start paying PF, you can not stop.
The only way out is to close the old firm (I assume it proprietary) and start a new one in your name.
Then you only PF when you have more than 20 employees in a single enterprise.
For your new employees, you are exempt from paying PF for them till September 2014 provided :
- each of them joined your company on a salary of more than ₹6500 per month (your salary structure must be only basic, don't break up into allowances.)
- each of them did not have any existing PF account from former employment.
- they filled form 11 when they joined (or get it done now with old dates)
However, you will still have to pay minimum administrative fee, which is about ₹7 per month. You can do it with retrospective effect now..they are unlikely to impose penalty on that as the amount is small. However, expect a visit from the department to inspect your books and you need to have the documents to show you don't owe more money.

Dear Brij,
Once a establishment is covered under the provisions of EPF either compulsorily or voluntarily coverage as the case may be, it will remain under it till it is closed permanently.
As you have not paid contributions for a long period, damages to the extent of equal amount so defaulted and interest @15% will be levied by the department.
The ceiling limits till 31.08.2014 was Rs.6500/- per month (only basic and da) and at present it is 15000/- per month. An employee getting beyond the ceiling limit is treated as a exempted employee subject to he may not have been a existing member to the scheme at the time of joining.
It is in your own interest to maintain proper records of payment of salary / wages matching with your balance sheet.
P K Sharma

This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2019 Cite.Co