Vignesh Subramonium

The employee joined with firm 9 years back and @ 8k in hand and got esi and pf. He left the firm in 1 year and took out all his pf contributions. Future firms did not provide him PF/ESI afterward as per checked by his UAN. Now he came back to the 1st firm for the job and wishes to join for a 23k salary. Now the firm has to give him PF/ESI or not? Because the firm wants to give 23k CTC but the employee wants to join at inhand 23k.

So the confusion is if:
1. If PF/ESI is mandatory even now then the employee says he won't deduct anything from his account and firm ctc would be very high to the rate of 23k + pf (1.8k+1.8k)+ esi.
2. He says he doesn't need pf/esi cuz he has nil balance in his account and hence firm doesn't need to increase ctc.

Firm needs employees but doesn't want to increases its cost burden. I hope I was able to explain the issue, if not clear, please respond and i will try to clear it.

Also, he says he will join only if yearly bonus is given, but firm said bonus is only given if salary is under 21k. Employee says bonus is for every employee and not fair if not given to him. Firm is confused cause he is the only person with highest salary for the firm.

From India, Bengaluru
Labour Law & Hr Consultant
Partner - Risk Management
+1 Other


Dear Vignesh,

As I understand from your narration, the particular employee joined your company 9 years ago and left after a year of service during which he was a member of EPF and ESI on the basis of the salary he was receiving then. Now, after a break of 8 years of employment elsewhere without enrollment into both EPF as well as ESI for reasons unknown, he wishes to join your company again with a salary of Rs 23 k per month and insists on exclusion from both.

Therefore, in my opinion,
(1) By virtue of his proposed monthly salary, he is not required to be covered under the ESI Scheme.
(2) As per your narration, he had already withdrawn the entire amount from his EPF account and ceased to be a member of the Scheme for the past 8 years. Moreover, his proposed salary certainly exceeds the threshold limit for EPF. Therefore, he need not be covered under the EPF at present as per his request.
(3) Regarding statutory bonus, the PB Act,1965 dose not prohibit the payment of bonus to those employees drawing a monthly salary over and above the threshold limit. If you deem that he is an indispensable employee, no harm in adding a bonus clause in the contract of employment.

From India, Salem
Vignesh Subramonium

Dear Sir,

I know from employee that he took out his PF amount which the firm gave him 9 years back and never got any PF from other firms after that, but I do not know that if this case can be called that the he is ceased to be a pf employee because someone just told me that, if once a member of PF, even if there is a break they are member of PF even if the withdrew their entire amount, so I'm kind of confused about what is correct and what is wrong.

Can you please help me out in understanding this.

From India, Bengaluru

If he took out all hs money form pf, then the account gets closed automatically. If the account still exists and shows active, then he is lying about not getting pf contribution earlier.
From India, Mumbai
Vignesh Subramonium

Ok, my doubt is and please correct me if i am wrong, i thought that entire pf money cannot be taken out until 58 years because pension money will be remaining. But the employee's age is only 35 now. So, he did take out whatever amount he could i guess. In that situation is he a PF member now or not based on the previous information provided.
From India, Bengaluru

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