Is It Possible to Opt Out of EPF and ESI in a Small Company with 30 Employees?

Hi All Seniors,

If I am working in an XYZ private limited marketing company with 30 employees without registration in EPF and ESI, is it necessary to be registered into EPF and ESI if everyone is withdrawing 20K per month in cash or cheque? Could they withdraw their salary without any deduction? Is there any way to opt out of EPF and ESI?

Dear vxlgaurav,

You will have to register under the PF Act and submit Form No. 11 regarding employees choosing not to become members of the EPF scheme. If any employee was a member of PF in a previous company, they must be covered under the act.

Regards,
Rajendra Bhavsar

Provident Fund Registration Requirement

If the basic salary plus Dearness Allowance (DA) of all employees is above Rs. 6500 per month, there is no statutory obligation to register with the Provident Fund (PF). Even if some employees were covered under the Employees' Provident Fund (EPF) in their previous employment, it will not be applicable for their current employment.

Regards,
Abbas.P.S

Thank you so much for sharing the information. But tell me, if we receive cash as salary and have no salary heads like basic, DA, or HRA, then what should we do?

Query on ESI and Salary Increment

My boss wants to close the ESI by raising the salary with a 100% increment above the ceiling limits. Is this correct? Kindly guide me with an immediate reply.

Thanks with regards,

Sahanasamu

It is correct. Once you cross Rs. 15,000 per month gross, you will automatically come under ESI. However, you should continue to deduct ESI contributions until the end of the contribution period.