Can Employers Stop PF Contributions After Salary Increases? Seeking Legal Advice

Dear CiteHR Member,

I need your help to solve a problem. Please tell me if an employee joined with a salary of 5000/- per month (PF + ESI benefits started from his date of joining) and after one year he received a 2000/- increment, so now his salary is 7000/- per month. Could you please tell me if the employer decided to stop his PF contributions because he has crossed the limit of 6500/- (which is the high PF contribution limit)? Is this legally possible according to the Provident Fund Act? What action should the employee take?

Thanks,
Amit

Once a PF paid employer has to complete six months, you cannot stop it immediately. Secondly, 7000 is the basic salary, and then you have to submit PF by calculating 12% of 7000. After six months, you can withdraw his name by showing proof.

Hi Amit,

Please find the enclosed file. You will understand the calculations.