Is It Fair for Employees to Pay Both Parts of PF Contribution? Seeking Guidance on My New Job's Policy

Hi,

I have recently joined a new software firm; it's a CMMI Level 3 company. In my salary structure, they have not included any component for PF contribution. They mentioned that their company doesn't have it or do it. If I have to opt for PF deduction, then I will have to pay 24% on my own, as they informed me, i.e., 12% employee contribution and 12% company contribution, both to be paid by me.

Is this true? Until now, my earlier company has opened my PF account, and both myself and the company have contributed. I also inquired if I could contribute only for myself, i.e., 12%. They responded with a "NO." If I choose to go for PF contribution, both should be paid by the employee only. How accurate is this information?

Please suggest and guide me on how to proceed. I am experiencing a loss of 12% from my salary account.

Regards,
Blue Eagle

Hi,

This is a very common employee problem faced by employees. Most companies do not differentiate the employer's and employee's PF contributions; instead, it is shown as part of the Cost to Company (CTC). Since it is included in the CTC, it is deducted from the same amount. Hence, in the future, make sure to carefully review the CTC breakdown before accepting any job offer.

Regards,
Niraj Sharma

If the number of employees (including excluded employees) in your organization is 20 or above and your salary is equal to or below Rs. 6,500, it is the obligation of the employer to contribute both your and the employer's share to PF.

Regards,
Abbas. P. S.

I agree with abbasiti. Under the situation, it is OBLIGATORY for the employer to contribute his share, as per law. The employer cannot recover the amount from the employee under any circumstances—CTC or no CTC—in whatever way it is calculated.

Warm regards.

Dear Niraj,

What you have stated may be the truth or reality; however, you must know that it is ABSOLUTELY ILLEGAL.

EMPLOYER'S SHARE of P.F. is meant to be paid by the EMPLOYER. There cannot be any compromise, arrangement, calculation, or "jugaad" over it. How can an employer show the recovery from the employee in his account books? He cannot; as it is ILLEGAL. Therefore, this money becomes BLACK and becomes a threat to the nation's economy.

Warm regards.