As such, there have been no recent amendments in PF rules. However, there was one amendment many months back; I don't remember the exact timing. The change was that now Leave Encashment will also fall under PF. Both the employer and employee have to contribute from the amount of leave encashment.
All those who are aware of the amendment have implemented the same. In my current and previous companies, we were following it. Many other companies have implemented the same.
Amit is quite right. You must deduct PF on leave encashment. This rule has existed previously. However, a recent case in the Supreme Court has made it clear.
As advised, there is an attraction of PF contribution in the leave encashment made to an existing employee annually. In the case of an employee leaving the services of the organization, there is no requirement for the deduction of EPF contribution in the leave wages settled along with other legal dues.
As per provisions of the Act, there is a mention that Leave Encashment paid at the time of separation of an employee doesn't deem to be considered as wages; hence, it doesn't attract EPF contribution. Other than this, the status of Rs. 6500/- as basic plus DA wage for coverage of an employee has not been amended.
This is new to me. It will be great if you could provide us with the notification or the rules in the EPF Act. As per my understanding, leave encashment paid to an employee is to be taken as wages as per the Act.
Kindly let me know if leave encashment is a necessary payment that should be made to all employees. If a certain company doesn't provide the leave encashment benefit but allows employees to avail all leaves in a particular financial year, with any unused leaves subject to lapsing, is it legal and acceptable? Kindly shed light on this matter.
As per my knowledge, the government has decided to void all excluded trusts. All trusts that do not have the EPS scheme must register with the RPFC for the EPS scheme. Exempted trusts will remain the same; there are no changes. For any further clarification, you can email me at navpreetbansal@yahoo.com.
Is this applicable to a company that is exempt from PF because all the employees have a basic salary above 10,000, but the employer has a PF trust to establish an employee welfare scheme and provide them with tax shelter? I was informed that we do not have to worry.
If any company's all employees are getting more than 6500 salary (basic + DA) but there are more than 20 employees, it is still mandatory to have a PF establishment code registered with EPFO.
(Basic+DA) which exceeds Rs. 6,500/-, but in our case, all are above 10,000/-, and we have a private trust operated by a third party. We had made a PL encashment to employees last year but did not deduct PF on it. When I checked here, I was told that it is only for those companies for whom PF deduction is mandatory.
There is no noteworthy amendment in the PF Act, but there is a proposal to withdraw the ceiling limit of Rs. 6,500/-, irrespective of the basic salary drawn by the employees.
Do you have a company with more than 20 employees? Please, if possible, state your company's nature of business so I can provide you with relevant information.
As per an article in TOI dated 07.07.08, PF is applicable to those concerns where 10 or more employees are working, whereas previously it was 20 or more. Kindly provide more information, please.
The minimum limit of 20 persons has been reduced to 10 for obtaining PF registration. A notification regarding this change is expected to be issued shortly.
One clarification - if leave encashment is being made after resignation and towards F&F, still PF to be deducted on final settlement. Final month salary PF deduction is okay on final settlement.
Deduction of PF from leave encashment has been further amended. It is now optional. An employee can contribute to his PF from leave encashment, but for the employer, it is optional, meaning the employer may not contribute the matching amount. There is a Supreme Court judgment on this matter. One more amendment is in the pipeline in connection with the Investment Pattern of PF money of exempted trusts, which will be applicable to the exempted PF trusts only.
I remember that there was a post on our Cite HR forum stating that the Supreme Court ruled that the money received by an employee from encashing earned leave could not be considered as wages for the calculation of Provident Fund (PF) contributions.
Please search through our Cite HR for more information on this matter.
Please clarify for me the definition of a dependent (Person) in the new amendment to the ESI Act. I am currently employed at Star Wire India Ltd. My boss has asked me this question, but I am not familiar with it. Kindly assist me in this matter.
I have 2.5 years of experience in P&A. Currently, I am working in an automobile company. However, I am now seeking a job change. If you have any requirements in P&A, please help me.
Hi, I am looking forward to vendor empanelments, working with One Touch Solutions (BPO) as an HR. I am looking forward to empanel vendors to my company. Please contact me at 9540803960.
This amendment is no longer valid. The Supreme Court gave a verdict quite some time back repealing the amendment regarding compulsory PF deduction on leave encashment. Therefore, there is no rule requiring employers to contribute to PF on leave encashment.
Hello everyone, I want to know about recent amendments in PF.
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