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Dear All,
Today we has EPF Inspection in our Office Premises. During Inspection there were certain queries put forth
1. One of our vendors haven't paid PF and opened an account for their employees (We are paying the vendor the total sum along with the PF contribution). Now the PF Inspector has asked us to pay the amount as we are the principal employer.
2. The basic pay is 33% in our organization from Gross pay. The Officer has requested us a clarification on this.
3. Trainees who join us will be payed stipend for the 1st one year (Rs 16,500). We calculate and pay PF keeping the entire stipend. Next year when the trainees are converted to regular employees (the basic pay is less than the stipend, Rs 7,000) here we pay for the basic. Now the question arises why we pay pension starting only in the second year. Officer has requested us a clarification even when we said that the basic is less in the second year so we start deducting pension.
Please help me understanding and clearing these issues.
Nagarajan Sekar

1) In Brakes India Ltd. (Brakes Division), Sholinghur-631 102, rep. by its Vice-President (Pers. & HRD) vs. Employees’ Provident Fund Organisation, Vellore rep. by its Regional Provident Funds Organisation, 2015 LLR 635, the Madras High Court buttressed the same point in holding that the Employees’ Provident Fund Authority is not entitled to recover either Provident Fund contribution or damages from the principal employer in respect of employees engaged through contractors, registered with the PF Department, having independent code number. The Hon’ble Court concluded : Hence the claim of the PF Inspector is not maintainable.
2)There is a internal circular in Provident office. The Provident Fond Contribution should be minimum 60% of the Gross. PF Inspector claim in maintainable.
3) Any reduction of contribution is questionable. However you can convince the Inspector, due to rationalization of salary structure, the reduction in PF contributions, which is unavoidable.

Dear Babu, Thank you for the Information. Regards, Nagarajan Sekar
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