Is PF Required When Basic Salary Drops Due to Absenteeism? Seeking Clarity

Dear All, I want to know if in my company, where we recruit some workers on a basic salary of 7000 without PF, PF becomes applicable when their basic salary decreases to 6500 due to absenteeism. Is PF applicable to them or not?

PF is not applicable to this case. If his basic salary is Rs. 7000, then as per the PF Act, this employee is exempted from PF whether he is present or absent.

With regards,
Vineet Deshmukh

If the salary of an employee is less than 6500, PF has to be deducted. However, if the company provides a salary of 7000, there is no need for PF deduction, even if the amount becomes less than 6500 due to the employee's absence.

Regards,
Basima
Labour Net

Dear Mathew & Basima, If an employer voluntarily covers PF, what is the gain for the employer, as they also have to contribute equally to PF? Yes, if the employee covers it voluntarily, they definitely have gains. But what about the employer? I have always had this question in my mind. 樂

Regards,

If the basic salary is more than ₹6,500/-, we also have to pay PF as an employer contribution. ₹6,500/- is the ceiling for PF. If the basic salary is more than ₹6,500/-, we also have to pay ₹780/-.

That is why I was saying that it is for the employer to decide whether to apply PF even if the amount of salary is more than 6500, and the employee can't decide to voluntarily cover. The employer has to cover all employees voluntarily who are drawing more than 6500. In some MNCs, for the purpose of attracting employees, they voluntarily cover employees who draw more than 6500 as salary.

Dear Kumar, that is why I was saying that it is for the employer to decide whether to apply PF even if the amount of salary is more than 6500, and the employee can't decide to opt for voluntary coverage. However, the employer must cover all employees voluntarily who are earning more than 6500. In some MNCs, to attract employees, they voluntarily cover those earning more than 6500 as salary.

PF Coverage in Organizations

In any organization, regardless of its status as a company or firm, if it limits its contribution only to employees below the PF limit basic of Rs. 6500 from the beginning of the coverage period, then there is no need to cover staff whose basic is above 6500. However, if the organization covers all employees, regardless of basic pay being below or above Rs. 6500, then no single new or old employee can be exempted from PF coverage even if their basic pay is above Rs. 6500. However, by submitting Form No. XI, a new employee can be exempted.

Regards,

I want to know if our Head Office, which has 10-15 employees, and the factory, which has 300 workers covered under PF with a PF code, are subject to the following:

1. Is the Head Office eligible for PF even with 10-15 employees?
2. Do we need to apply for a new PF code, or can we use the same code even if the factory is established in another state?

Please suggest.

EPF Deduction Rules for Salaries Above Rs. 6500

Please provide me with the rules stating that for salaries/wages above Rs. 6500/-, EPF should not be deducted. Please provide the relevant section number. I will wait for your valuable reply.

Regards,

Thanks for your valuable suggestion. Let me know:

1) As per the act, we are eligible because the number of employees is 10-15 at the head office. In our factory situated in a different state, the number of employees is 300, and the factory has a PF code.

2) If eligible, then which code should be used - a new one or the same code as the factory?

Dear seniors, I have questions about PF. One of my employees wants PF benefits, but his basic salary is more than ₹6,550. He is not eligible for PF deduction as per the law. Now, my question is that he is ready to have his PF amount (12%) deducted, but management doesn't want to pay their PF contribution (13.61%). What can I do in this situation? Kindly give your suggestion ASAP.

Dear sir, Greetings for the day, first of all, tell me whether that particular employee was earlier covered under EPF or not.

Thanks & Regards,
From,
Sumit Kumar Saxena

The employee you are referring to can contribute 12% of his salary (BP+DA+RA) if he was earlier a PF member by fulfilling the conditions of para 26(6) of the scheme. There are companies that cover all employees irrespective of salary limits.

Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]