PF Deduction Confusion: Is It Mandatory for High Earners Who Were Previously Enrolled?

Sir,

Is PF deduction mandatory when the employee joins with a basic salary of more than 6500/-, but he was a member of PF in the previous institution which he left?

Dheeraj

Dear Dheeraj,

Basically, if he was a member of the previous organization and now his basic is more than 6500, legally he should be made a member of PF. My friends will be surprised to know this, but it is a fact. To avoid this, the employer asks new joiners to fill up Form 11 of PF, which is a declaration that he was not a member in a previous organization.

Thank you,
J.S. Malik

Sir,

I think the PF deduction should not be mandatory if the employee was not a member of PF in the previous institution which he left, and now here his basic is more than 6500/-

Dheeraj Bhai Audichya

Dear Dheeraj,

You are absolutely right regarding the above statement, but your original query was different and opposite to the above statement.

Thanks,
J. S. Malik

Respected sir,

Our institute is appointing an employee whose basic salary will be more than ₹10,000 per month. In the beginning, he said that no PF is being deducted from his salary at his current workplace. However, he is now stating that PF deductions are being made from his salary.

Dheeraj Bhai Audichya
09935611640

Dear,

I mentioned that as an employer, you should take Form 11 from everyone at the time of joining. Now, it is your choice to make them a member or not if their basic salary is more than 6500.

Thank you,
J. S. Malik

Hi all,

Can anyone clarify the following points, please:

In case of people appointed as retainers in an organization:

- Are the retainers considered employees under labor law, and if so, is it mandatory to convert their employment terms to that of employees?
- Do the retainers fall under the purview of the provisions of the Provident Fund and Gratuity Act?
- If the retainers should be covered under the Provident Fund and their Basic pay should be higher than Rs 6,500 per month, should they continue as retainers as per the company's records or should they be allotted a Provident Fund Number with a Nil return required to be filed (Form 11 obtained)?
- How can the current retainers continue as retainers? For example, could the terms of employment be modified (ensuring that the benefits applicable to all employees also apply to them)?

Regards,

Dear Friends,

Mr. Malik ji is correct. PF is mandatory as it is a form of social security for the employee. Even if the employee's wage is increased to more than Rs. 6500/-, it is advisable to cover the PF at Rs. 6500/- only for such employees to continue being a member of PF.

Regards,
PBS KUMAR

Hello Mr. Malik,

I have a query. Is it doesn't matter that the employee strength of the organization is more than 12, so PF deduction is mandatory for the employee? Because if this were the case, that we ask for Form 11 from every employee, then the Cost to Company will be automatically deducted, which will increase the burden on employees due to TDS deductions as well.

Please provide your valuable comments on this.

Regards,
Bharat

Hello Mr. PBS Kumar,

I need your comments as well. Please suggest.

I have a query. Does it not matter that the employee strength of the organization is more than 12, so PF deduction is mandatory for the employee? Because if this were the case, and we ask for Form 11 from every employee, then the cost to the company will be automatically deducted, increasing the burden on the employee due to TDS deduction as well.

Please provide your valuable comments on this.

Regards,
Bharat

Dear Bharat ji,

The question is whether the employee draws his salary more than Rs. 6500/- pm is covered or not. PF is mandatory, which means if your organization is covered as per the act, then if any person's salary/wages crosses more than Rs. 6500/- pm, it is advised to deduct the PF @ Rs. 6500/- pm minimum, instead of avoiding it. For this, PF authority will not object.

Regarding issuing Form - 11, does the HR department come to know whether the new employee is covered by PF in the previous organization or not.

Regards,

PBS KUMAR

Dear All,

Mr. Kumar is correct. New employees who are earning more than Rs. 6,500/- should be covered under PF. If an employee's basic salary is Rs. 10,000/-, we must deduct PF on Rs. 6,500/- (which is mandatory). PF deduction above Rs. 6,500/- depends on the company's policy. Some companies only deduct up to Rs. 6,500/-, while others deduct based on the total basic salary.

Regards,

Raghav

Hi all,

Is there anyone to answer my query which is posted in this thread regarding the applicability of PF to retainers?

Regards,

Dear All,

Please advise whether employee PF deduction should be mandatory or not. If yes, kindly provide the reasons for this decision. If not, please explain the rationale behind it.

If you have any circulars or notifications on this matter, kindly share them with me at rohtash.kumar5@gmail.com.

I eagerly await your response.

Thanks & Regards,
Rohtash/Rohit
9958112121