Can a UP PF Inspector Legally Inspect Our Delhi-Registered Company in Noida?

Hello all,

I am associated with the HR department of a company with its registered office in Delhi, employing 40 people in Noida, 21 in Mumbai, and 20 in various towns like Goa and Cochin.

We are depositing PF for all the employees in Delhi. Last week, an inspector visited our office for inspection. Can he conduct an inspection from the UP PF office for a company that processes all its deposits and reports centrally in the Delhi PF office? If so, shouldn't he obtain prior permission from the Delhi PF office?

I informed him that any inspections should result in reports sent to the Delhi office. Upon receiving feedback, we will comply with the necessary actions.

Could someone clarify if they have the authority to inspect a company like ours in Noida, which is registered in Delhi?

Regards,
Ruby
9818995055

In my last message, the additional information I want to give is that the PF Inspector came to inspect the Noida office.

Regards

If employers are paying PF contributions at 12% of the Actual Basic for their employees, is it possible to reduce the PF contribution to Rs 780 only (12% on the minimum basic of Rs 6500).

Regards,

Revasuja

If employers are paying PF contributions at 12% of the Actual Basic for their employees, is it possible to reduce the PF contribution to Rs 780 only (12% on the minimum basic of Rs 6500)?

Regards,
Revasuja

Dear Revasuja,

Yes, it is possible to cut down the PF contribution to Rs. 780 only. No problem at all. However, an intimation to PF will be a proactive step and should be done.

Regards,
Ruby

Hi Ruby,

Since you are under the jurisdiction of the Delhi PF office, the inspection should happen under the instruction of the Delhi PF office, and only the inspectors from the Delhi office should visit your office. I do not know whether you asked them from which PF office they came to visit and check your documents and whether you have mentioned that you are under the jurisdiction of the Delhi PF office. One PF office does not interfere in the matters of the establishments that are under the jurisdiction of another PF office unless there is a request from the concerned PF office. You should immediately get in touch with your jurisdictional PF authority and enquire whether they had sent any inspection team to your office and keep them posted. In the future, if you have any doubts regarding any inspection from the PF office, you can always defer it by saying that the concerned person is absent today or that the documents are not readily available here, and ask them to visit another day with prior information. During the breather, you can check with your jurisdictional authority about the correctness of the inspection.

As per my knowledge, even if you are under the jurisdiction of the Delhi PF office and you have branches in different locations that fall under, for example, the U.P. office, the inspection team from the UP PF office can perform the inspection because the said organization comes under the coverage area of the respective Regional Office. The team can conduct the inspection to ensure compliance is being met properly. Whether the compliance is from your Delhi Office, they do not have any objection. Proper justification with documentary evidence is required to be presented before the authority.

Ruby, without challenging the authority, please note that they are permitted to check PF reports, records, challans, returns, etc., irrespective of the location. Please ensure that a copy of challans, returns, and other records is given to the respective location to face any such audit or visit. Also, I request you to keep the inspection book at all locations.

Thanks

Dear Ruby,

Under Sec 2A of EPF & MP Act, records of the establishment in Noida can be inspected by the UP PF office. However, to my knowledge, they can only access the Attendance sheet, Salary Sheet, Challans summary, and Form 6A of employees working at your Noida site.

Regards,
Jony_M

If any P.F. inspector visits your site offices and asks to show the P.F. returns, then you can send the photocopy of challans and P.F. details. They should display the employees' names and their contributions. These contributions should reflect in P.F. Challans. This way, you can prove that your establishment is depositing the P.F. in respect of those employees working in site offices. In India, almost all companies deposit the challans from their Head Office. Additionally, companies deposit different challans for different sites, but all are from the Head Office.

Rajiv Singh

Hi Ruby,

Regarding the inspection of PF Register by the PF official, he can inspect and inquire about any office PF records at his headquarters. Since your company is registered in Delhi only, both Delhi and Noida are in the NCR region. Therefore, he can inspect all branches' PF documents in Delhi only.

Thank you & Regards. Please feel free to ask any queries.

Bhagwan Tolani Sr. HR TM Group Mumbai [Login to view]

Hi Ruby,

If there is some loophole found by the Delhi PF Inspector, the inspection of your other branches is possible. If the Delhi PF Inspector is not satisfied with your report, then branches inspection is also possible. The inspection of your branches will be carried out through your Regional Office or Sub-Regional Office of that area in the report of the Delhi PF Office. If your compliance is good and all your documents are in the proper way, and if you have shown all the papers regarding every branch, then there is no need to worry if branches inspection will be done. We can't stop visiting our branches; it is necessary for the verification of records only.

If you have further queries, please let me know.

Arihant
(94288 21736)
arihant_ac@rediff.com

Hi,

According to my knowledge, whatever the employee's contribution, the same amount should be contributed by the employer. We need to convince the employee for a 12% deduction of his part or ₹780, whichever is lower. Then the employer can also deduct ₹780.

Srikanth
9703020990

Dear Friend,

Please answer the following:

1. How is PF compliance done in your organization?

a) Is it all done in any one place - Mumbai, Noida, or at Delhi, for all employees at all three locations?

b) If it is decentralized and PF compliance happens at three places separately for each location independently, then whenever PF Inspection is done at any one place, then records of that particular location need to be produced before the Inspector. For the other two locations, copies of Inspection Reports & Compliance reports for the relevant period may be produced before the Inspector. This will suffice.

2. If PF Compliance happens at any one location for all employees of all locations, and if the Inspection is to be done at that location, then all Books of Accounts and records called for by the Inspector will have to be produced for his Inspection at that location.

3. If PF compliance happens at one location for all employees of all locations and Inspection is called for at any other location, then you can give to the Inspector a written compliance report stating that you have centralized compliance of PF at, say Mumbai, and that regular inspection of all related records is also done at Mumbai. Attach the Inspection Reports and Compliance Reports of all the Inspections done at Mumbai, for the period that the current Inspection is called for. You can also add in the letter that in case the Inspector wants to seek any further clarifications he could contact the Inspector of that location, say Mumbai.

I hope my inputs will help you with your PF Inspection.

For any clarifications please feel free to contact me on my mobile 09717726667 or my email ID: vasantnair10@gmail.com.

Best Wishes,

Vasant Nair

Generally, employer's share of PF contributions is included as part of the CTC while fixing his/her remuneration package. So long as the promised CTC is not reduced, restricting PF contributions (employer's share) as per the PF Rules is fine. Else, I will not recommend this step as it would then amount to reducing the originally promised CTC.

Vasant Nair

Mr. Vasant Nair,

As per your requirements, I want to clarify the points below:

1. We are ensuring PF compliance from the Head Office.

a) Yes, it is all managed from one place, i.e., the Head Office. (For your reference, we have 27 branches across two states).

b) No, PF is centralized, and PF compliance should be handled only from the Head Office. If a PF Inspector visits your Head Office, you must provide records (such as the Salary Register of each branch, PF Monthly Summary for PF Challan payment) along with the PF Challan File. If a PF Inspector visits your branches, show the branch's Salary Register, Muster Register, Copy of Challan, and details of the Head Office.

After the Head Office inspection and if the PF Inspector makes a Visit Note in the PF Visit Book, send a copy of the PF Visit Note to each branch. They should produce it whenever a PF Inspector visits that branch for their reference.

2. Regarding Point 2, assuming the defined location is the Head Office, yes, for PF inspection, all records should be at the Head Office, where the PF Inspector will visit and verify.

3. If your PF inspection is conducted from the Head Office, it includes all branches. When the PF Inspector wants to verify the actual strength of each branch, they may contact the concerned SRO or RO of PF in the area where your branches are located for routine checks of the Muster Register and Salary Register. If your inspection is thoroughly verified by the PF Inspector and a PF Visit Note is issued, send a copy to each branch to produce in case a PF Inspector from that area visits your branches.

I hope my clarification is clear.

Arihant
(94288 21736)
arihant_ac@rediff.com

Dear Revasuja,

As per Sec. 12 of EPF Act, 1952, employers cannot reduce wages (rather say Basic Pay) of any person, thereby reducing the contribution. In other words, P.F. deduction being made over actual basic pay (> Rs. 6500/-) cannot be reduced to the ceiling limit of Rs. 6500/-. Ruby's suggestion is not correct.

D.K. Moitra

Dear DeB Kanti Motra,

Employer can anytime take the decision of reducing the employer's contribution to a ceiling of up to 6500.

There is no statutory problem from PF authorities; however, the criticality lies more in how you tackle and convince the staff.

I have clarified everything with the Delhi PF offices, and they do not have any issue if we do this.

To add more to your query or statement, in a recession, many companies have reduced and stopped some allowances, which ultimately results in reducing their pay. Legally, any employer can reduce the wages or pay of anybody. The bottom line is that from a PF perspective, it should not go below 6500.

One of the PF offices did not even ask for any information to be given to them if we want to switch over to the option of deducting PF on the ceiling of 6500.

If you require more clarification, you can call me, as this is a very long write-up otherwise, and I can update you on the discussions with the Assistant PF commissioners of different offices regarding the same.

Regards,

RubySan