Is PF Mandatory for Employees with a Basic Salary Above 6500 in a Small Company? Urgent Help Needed

Hi,

Can someone please advise if we need to provide PF if the basic salary is above 6500/-? Our employee strength is 25. According to our consultant, once a person is covered under PF by any of his ex-employers, he has to be covered by his present company as well.

Please confirm. It's very urgent.

Hi Vidya,

Thank you very much for your prompt reply.

So, as per what I understand from your email, we need to be covered under PF regardless of our basic being above 6500/-. As our company is an MNC, I need to provide the required documents to support it. Can you please send me the PF act which testifies the above statement? I would be very grateful.

Thanks and regards,
Smita

Dear Smitha,

Please find the attached document. I hope it would help you.

Regards,
Vipin

Dear [Name],

Legally, your consultant is correct. However, we refer to Form 11 provided by the employee, which states that the individual was not a member earlier. If the basic salary exceeds 6500, the employee is considered exempt from PF deductions. In such cases, it is necessary to obtain Form 11 from the employee.

Regards,
JS Malik

Dear Smitha,

Mr. Malik is absolutely right. You can take a declaration from those employees, stating that they were not a PF member earlier. This is the practical approach. However, if your management insists on complying with statutory regulations, then once again, Mr. Malik is correct - you will have to enroll them.

Wishes,

From,
Vijay Vashisth
09992334610

Hi,

Can someone please advise if we need to provide PF if the basic salary is above 6500/-? Our employee strength is 25. According to our consultant, once a person is covered under PF by any of his ex-employers, he has to be covered by his present company as well. Please confirm. It's very urgent.

You can deduct PF if the wage is above 6500, but for that, you have to take consent from the employee in the format below:

To, The R.P.F. Commissioner

Dear Sir,

Sub: Granting special permission for deduction of P.F.

You are hereby requested to please grant me special permission for deduction of the Provident Fund from my PF wages above Rs. 6500/- per month w.e.f. _______ and my P.F. A/c. No.

After receiving the above consent, you have to forward the same with a proforma for submitting permission under para 26 (enclosed). However, from the employer's 12% share, you have to deposit FPF maximum 8.33% of 6500, i.e., Rs. 541/-, and the balance amount you have to add in 3.67%.

For example: PF wages are Rs. 7000/-
Employee's contribution is Rs. 840/-
Employer's contribution is Rs. 840/- (EPF 3.67% Rs. 299/- and FPF Rs. 541/-)

IM Gandhi

Please note that a person whose basic salary is less than Rs. 6500 is covered under the PF included clause. If the basic salary is more than Rs. 6500, the person is covered under the PF exempted clause. In this case, there is a choice to opt for PF, but it is not mandatory. If you choose not to opt for PF, you must fill out the excluded form.

Dear all,

Even employees covered under PF in a previous employer (basic wage < 6500) do not need to have PF deducted from their salary if the basic wage is > 6500 in the current company. If the current employer has any PF policy, we can pay based on 6500 if the basic wage is > 6500; otherwise, there is no need to deduct.

Suppose an employee continues in one company, and after some years, they earn more than 6500 basic wage. In that case, we must contribute the PF amount, at least based on 6500, i.e., Rs 780. If the employer wishes to provide based on the actual basic wage, we can contribute accordingly.

Dear Smita,

As per the PF Act, the minimum requirement is 20 workmen on the roll. Please check the same with PF authorities for making a reliable decision and ensuring safety.

Regards,
Sachin M.

To register Shops and Establishments, PF, ESI, and PT registrations, you need to follow specific procedures and submit the required forms. Could you please provide me with the details of the process and the necessary forms for submission?

Hi,

There are new amendments to these rules; I have attached the presentation by PWC.

Regards,
Manuel

Dear All,

As per the PF Act, only employees who earn below 6500/- need to be covered by the PF Act. This implies that the employer has the option to exclude or include individuals earning above 6500/-.

Regarding the previous employer, we should complete Form 11 as advised by Mr. Majlis.

Can any employer discontinue providing PF if an employee, after receiving an increment, is earning more than 6,500 basic? What is the procedure for discontinuation?

If an employee earning more than 6,500 wants to receive PF, but the employer is not interested in providing it, can the employee still claim it?