Provident Fund Calculation: Should It Be Based on Total Employees Across All Factories or Per Factory?

If a company has three different factories performing separate work at different locations, will the calculation for Provident Fund (PF) be based on a total of all three factories or 20 employees per factory?

Hi,

The PF Act prescribes 20 or more employees per concern. You need to calculate the volume of employees in a single factory.

Regards,
Ashok.

Your question is valid but cannot be answered as there are insufficient facts. Both views can be taken depending on facts. It would depend on whether and what kind of functional integration is there in 3 factories and on a lot of other factors. So come up with full facts.

Your question is very valid. So, for application to your three factories, you have to find out where the PF account number is applicable - only to your company or to all three. Also, determine if these three companies are interdependent on each other. Even the payslip of the employees from the three factories is given in the same employer's name, etc. Then, you should consult a legal advisor.

Regards, Sunil S. Mudgal

Hi Ashok,

For the purpose of PF coverage, if the management is the same or if there is a relationship between these 3 units, then you need to consider the total strength of the 3 units. Also, remember to include the headcount of all the direct and indirect employees associated with the company. As per your query, it is clear that the management is the same for all the 3 units. Hence, the count of all the 3 units should be considered.

Let me know if you need more clarification on this.

Regards,
Srini

If one company has more than one establishment in India, for PF eligibility, 20/10 employees (as per power use) will be included in all establishments in India. Please refer to the employer eligibility criteria in the PF Act.

Dear Ashok,

If the other factories are branches of the main concern or have the same ownership along with centralized registration, then the total of all concerns should be counted. If not, then a separate registration number is required.

Regards,
Pankaj Chandan

If they are interlinked in functionality and dependent on each other, altogether can count 20 or more. However, in the case of doing separate work, it's not possible to count all factory workers for PF jointly.

Hi all,

As far as I know, the minimum number of employees has been reduced to 10. Please check the attachment.

Dear Mahendrafuria,

Please refer to your attachment, your letter dated 7/7/2008. I have the following observation regarding this subject. Do you have any Official Notification from P.F. Office, New Delhi, and has any Regional Office issued any in this regard? The amendment will be valid from the date of the Notification. Other members may please clarify in this regard.

M.R. G. Raju ESI PF and Labour Consultant, Bangalore M- 9379555965