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Vignesh Subramonium

If a new joinee previously had PF who withdrew his entire PF money joined a firm at a higher salary bar above 15000 now. Is it mandatory to give him PF or Is it not? since he has withdrawn his entire PF amount and has a higher salary bar. The firm is not willing to give voluntary PF.
From India, Bengaluru
Ceo-usd Hr Solutions
Management Consultancy
+1 Other


There is a concept under PF & Misc.Act and regulation is " Excluded Employee" . In this case if the employee has joined the organization when he was a member of EPFO but declared wrongly in Form-11 and accordingly the new employer has been excluded the employee from PF coverage- then it is illegal.

If the employee settled all his dues ( PF & Pension ) and close the account and then joined in the new organization with more than 15,000/- salary per month , the employee should be considered as excluded employee and no need to cover under EPFO.

S K Bandyopadhyay (WB, Howrah)

From India, New Delhi

I have a different opinion based on my experience, though it was not exactly similar. The EPF (MP) Act 1952 mentions nothing about an employee who has already settled his account, as to whether his account can be reopened or not. In deed it clearly states that even if the employee has crossed the salary ceiling fixed under the Act, yet he continues to be covered. Once a member always a member, that is the principle. So even if the account is closed and settled that does not prevent the account from being reopened. At least it is very clear that if the salary is within the ceiling fixed, the account can be reopened. So the same would apply even if the salary is above the ceiling limit.
It is better to seek opinion of the RPFC in this matter, and if possible keep the contribution in a separate account.

From India, Mumbai

Para 69(5) of the PF & Misc.Act,1952 states as follows:-

"Any member who withdraws the amount due to him under sub-paragraph (2) shall, on obtaining re-employment be required to qualify again for the membership of the Fund and on qualifying for membership shall be treated as a fresh member thereof."

Therefore as mentioned above that the EPF (MP) Act,1952 mentions nothing about an employee who has already settled his account, as to whether his account can be reopened or not is not 100% correct as per para 69(5) of the scheme. It is not automatic but conditional. It is also required that the employee should be considered as fresh member.

Now if we read 2(f) - Excluded Employee of the Scheme along with Paragraph 69 and also Para 69(5) specially, it is crystal clear that my earlier conclusion is absolutely right. In this case the employer is not interested to contribute PF voluntarily which the employer has every right to do so.

In an equation under Algebra of mathematics where if A = B = C , then A= C. But in any legal interpretation there are explanations, proviso etc. which are not straight forward like the above equation. Therefore the comments " So the same would apply even if the salary is above the ceiling limit" is not a straight jacket equation.

The Excluded employees are :-

An Apprentice, An employee whose pay at the time he is otherwise entitled to become a member of the Fund, exceeds 15000/- per month, An employee who, having a member of the Fund, withdrew the full amount of his accumulations in the Fund.

In this case the employee should be considered under 69(5) of the scheme as fresh member.

If any employee settled his/her account from EPFO after leaving the job and joined in an organization which is covered under the scheme and the employee salary above the coverage limit- in that case if the employer allow him/her to join voluntarily under PF scheme that is possible but to considered as fresh employee. Also required to read the famous circular of EPFO Actuarial/18(2)2008/Vol.III/7738 in last week of August ,2014 wherein it is mentioned that if any employee joins in employment from 01.09.2014 on wards and the salary is beyond the coverage limit but the employer as per the policy of the organization covered the employee under EPFO, then no contribution to be deposited in EPS account rather entire contribution will be deposited to PF Account.

My only daughter after passing B.TECH from joined Sapient where her salary was within coverage limit and she was member of both PF & EPS. After 3 years working with Sapient, she left the job for her MBA and settled her PF & EPS account. After completion of MBA she Joined Godrej almost after 2.5 years and as per organization's policy she is a member of EPFO against her old UAN number ( Which will never change as linked to Adhaar number) but not the EPS member. If Godrej has not any policy to cover excluded employee under PF , Godrej may do so. From my experience and working with MNCs & Voltas , I have noticed that the MNCs and big Indian houses are covering employee under EPFO voluntarily as per organization's policy.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

From India, New Delhi
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