2014 Budget PF Limit Enhancement: Implications For Employer And Employee?

Dear friends,
It's not fair to indicate any suggestive calculations as at present, we should await the formal notification. All we can be sure of is the burden on the employers on a/c. of these developments is going to be substantial and take home pay will be less though it's going to be investment for the future for employees. Millions of new subscribers will be enrolled in EPF & Pension funds. Firms providing retiral benefits will have more business.

All HR Fraternity
Attaching herewith the latest circular,dated14- July-2014, issued by EPFO ( Ministry of Labour ,Govt. of India),New Delhi in respect of enhancement of statutory wage ceiling to Rs.15,000/- from existing Rs.6500/- under the Employees Provident Fund & Misc Provisions Act,1952.
Please go through the said circular and be ready for line of action accordingly.
Thanks,
Anil Sharma

The circular do not say anything about the ceiling amount of Rs. 6500/- It simply says, hitherto people drawing up Rs. 6500/- pm are eligible to become members in EPF. Now employees/workers drawing Rs. 6500/- to 15000/- pm are also brought into the ambit of EPF. If ceiling is lifted we have to subscribe more by reducing our takee home wage and also additional burden to the establishments.

Hi All,
I have an query as to from when is this new pf applicable??
I mean the ctc will increase from July salary or August Salary?

Also I want to know what is the significance of Form No- 11 which has been filled by the employees.
Supposingly if i dont want PF what procedure should i follow???

I need clarification if basic is say 50,000/- whether employer would require to deduct PF on 50,000/- or on 6500/- presently or 15,000/- after amendment.
I understand that in case Limit is 6500/- an employee can ask to deduct PF only on 6500/- and not on 50,000/- is it correct?

Dear Friends,
Due to enhancement of wage limit to Rs.15,000/-, maximum pension contribution will be Rs1250/-
Regards
AJIT DESAI
Management Consultant
HR & Labour Laws

1 - Some employers limit their contribution to PF Limit. So increase of PF limit will increase employers\' cost.
2 - Employers will include this additional cost in CTC of the employee to which extent employee\'s CTC will be reduced.
3 - Only benefit is employee\'s PF savings will get increased along with interest on it.
Further queries on this invited please

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Lots of queries bound to arise in everyone's mind, but like you we also keep guessing till such time the notification in B & W is out. And hence all these now remains nothing but hunches and predictions and wishes

News from the Press:

More contract workers to gain EPFO benefits

By Yogima Sharma, ET Bureau | 4 Nov, 2014

NEW DELHI: The labour ministry plans to extend the coverage of social security benefits under the Employees' Provident Fund Organisation (EPFO) to a larger number of construction and contract workers, a move that is in line with the series of labour reforms initiated by the government.

EPFO, a statutory body under the labour ministry, recently set up two sub-committees to study the gaps in coverage of construction and contract workers in the country under the EPFO net and suggest ways There are 45 million construction workers in the country, which makes the sector the third largest employer in the unorgansied or informal sector. Most of these workers are migrants.

Contract or temporary workers account for 28.8 million people in the formal/organsied sector. They are deprived of benefits like provident fund, minimum wages, gratuity and pension.

Besides, out of the total 397.4 million Indian workforce, 49.7 million are employed in the formal sector while 347.7 formal sector while 347.7 million are in the informal sector, thus deprived of all social security benefits that they would have been entitled to had they been under the EPFO umbrella.

A recent study by the Indian Staffing Federation showed that hiring of temporary workers is on the rise in government with 43% or 12.3 million of the total workforce in the government sector engaged in temporary jobs. "At least 6.9 million of this are engaged in flagship programmes of the government and .. and are deprived of minimum wages with limited to nil social security cover," ISF had found.

"Most short-term contract holders primarily receive a consolidated wage/salary with no additional contribution," the report had said.

Read more at:

More contract workers to gain EPFO benefits - The Economic Times