Are Retired Employees Over 58 Required to Have PF Deductions? Seeking Clarity on Legal Obligations

Hi,

I am working as an HR executive in a reputed organization in E.G. Dt A.P. In my organization, some people are working under consolidated pay. All of them are above 58 years of age and have retired from Indian Government service. They are working for our organization for a consolidated payment. We do not make deductions from their salary for P.F. Now, the PF authorities are questioning why they are not covered under the PF Act.

Please advise me whether the above-mentioned individuals are covered under the PF Act or not. I am totally confused because the PF Act of 1952 states that persons above 58 years are not covered under this act. However, the PF authorized individuals are stating that if we do not pay the PF amount for the mentioned employees, they will take action against our organization.

P.S. G. Rao

Are they working with you as a consultant/retainer? If so, then no PF deduction is required. PF deductions are only for "Employees" as per the PF act. Please go through the definition.

Thank you for your response.

Here, the employees were working for consolidated pay. They were not consultants, but they are above 58 years of age and have retired from Indian Railways.

Only those employees who have taken a withdrawal of PF accumulations and/or EPF Pensioners, and whose salary exceeds Rs 6500 at the time of joining, are treated as excluded employees. Therefore, if any person retired from government service joins you, they will be covered by EPF if their salary at the time of joining is less than Rs 6500. In your case, all these employees are retired from Indian Railways and may be pensioners but not "EPF Pensioners," and therefore, they cannot be excluded. Certainly, since they have crossed the age of 58, the employer cannot contribute towards their pension fund, but the employer should contribute the entire 12% in their Provident Fund alone along with the employees' share of contribution.

On the other hand, if any employee who had worked in an establishment to which EPF was applicable gets superannuated and withdraws their EPF accumulations, joining your establishment, then they need not be covered by EPF again.

Regards,
Madhu.T.K