Are Some Employees Missing Out on PF and ESI Benefits? Seeking Guidance on Immediate Inclusion

Respected All,

In my current organization, some of the employees are not being covered by PF and ESI benefits, even though their basic salary is below 6500/- and gross is 10000/-. Initially, I am proposing to the management to extend the benefits to the eligible personnel. If I receive a positive response, can I cover those personnel under the benefits with immediate effect? Need guidance.

Regards,
DG

In order to get covered under ESI & PF, you should be specific about the number of employees working in the company and also the nature of the company, whether power has been installed, and for what horsepower.

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I hope this helps! Let me know if you have any other questions.

Your query clearly states that PF and ESI Acts are applicable to your organization. Some of the eligible employees are covered under the schemes, while some employees who are also eligible for coverage are not covered due to reasons best known to you.

• How you managed to keep some eligible employees out of coverage of PF and ESI would be an interesting read. Moreover, how you managed the non-coverage from the probing eyes of PF and ESI Inspectors will be even more interesting to know.

• Anyhow, you are taking a big risk by not complying with legislations. It is better to have 100% compliance and cover all those employees under PF and ESI who are purposely left out.

• Maybe you will have to tell your management the possible cost of non-compliance (prosecution, labor unrest, public humiliation, loss of reputation, penalties, fines, damages, interest, litigation, etc.) in case you are caught.

• You can start compliance now. Sooner is better.

• However, you may still have to think of possible hardships and penalties for past non-compliance.

Thanks & Regards

Hi, I'm Chitra. We started production in March 2010. Now, we want to cover our PF & ESI registration. What are the criteria regarding the number of employees in the company for coverage of PF & ESI? What is the salary limit for coverage under PF? I heard that workers whose basic salary is up to Rs 6,500 are eligible for coverage under EPF. However, employees whose basic salary is more than Rs 6,500, it is not mandatory to cover them under EPF Act. Please clarify.

Hi, I am Anand. I am working in the telecommunications industry. My basic pay is 10100 (more than 6500) after confirmation. After two to three months of receiving my salary slip, I noticed that my employer doesn't deduct PF/EPF from my salary. My employer is a mid-ltd company with around 700-800 employees.

My question is, if the employer doesn't deduct, what is the alternative for PF deduction for employees like us (More than Basic > 6500)? Are there no government rules for PF deduction by the employer? Please guide me on this matter.

Dear DG & Anand,

First, I shall respond to DG. If you receive a positive nod from your employer, there should be no difficulty in bringing those with a salary in excess of Rs. 6500 under PF coverage. However, if their salary exceeds Rs. 10,000, they will be out of the coverage of ESI.

Regarding Anand: At the time of your joining, if your salary is more than Rs. 6500 and the employer is not willing to deduct PF, there is no rule to compel your employer.

Abbas P.S.

Dear DG & Anand,

First, I shall respond to DG. If you receive a positive nod from your employer, there should be no difficulty in bringing those with a salary in excess of Rs. 6500 under PF coverage. However, if their salary exceeds Rs. 10,000, they will be outside the coverage of ESI.

Regarding Anand: At the time of your joining, if your salary is more than Rs. 6500 and the employer is not willing to deduct PF, there is no rule to compel your employer.

Abbas.P.S

Dear Abbas, please update your knowledge; the coverage limit of ESI has been enhanced from Rs. 10,000 to Rs. 15,000 since May 2010.

Hi, I am Anand. I am working in the telecommunications industry, and my basic pay is 10,100 (more than 6,500) after confirmation. After two to three months of receiving my salary slip, I found that my employer doesn't deduct PF/EPF from my salary. My employer is a mid-sized company with around 700-800 employees.

Alternative for PF Deduction

My question is, if the employer doesn't deduct, what is the alternative for PF deduction for employees like us (with a basic salary more than 6,500)? Are there any government rules for PF deduction from the employer? Please guide me in this matter.

If your company has taken a PF code and complies with the provisions of the PF Act, then you may be covered under PF even if you are earning more than 6,500/- by your choice. There is no bar to that. Ask your management if you can be a member of the PF fund voluntarily; they can do so.

Hi all, our industry is service-based, and we have around 10 to 15 employees with a salary of Rs. 15,000. Not a single employee is earning less than this amount. Until now, we have not applied for PF coverage. Please suggest if we need to go for PF even though our employees are earning more than Rs. 6,500.

Regards,
Raj

Dear Abbasiti & Essykkr,

Thanks for your guidance. I will inform my management about becoming a voluntary member of the PF fund. Now, another question arises: in this scenario, if the management is willing to participate in the PF fund voluntarily, should the company add its part (12%) to my PF amount, or simply deduct my PF amount and deposit it?

Thank you.