Small Business Dilemma: Do I Need to Register for EPF After Hiring More Staff?

I started a new company with fewer than 20 employees. However, last month (July), we hired 2 more individuals, bringing the total employee count to 21. All of my employees have a basic salary of over $6500, and none of them have previously been enrolled in EPF. Do I still need to register for an EPF account?

Thanks

The EPF office doesn't state anywhere on its site that those drawing a basic salary above Rs. 6500/- are exempted. If that is the case, the necessity for EPF law doesn't arise at all. We all can get exemption or avoid enrolling for a PF code. Upon crossing 20 employees, it is the duty of every employer to apply for a code. Even if the employee count falls below 20 after a few months, you must continue to remit PF for the existing employees. This is where many employers make a mistake and end up paying a substantial penalty after a few years, which is 5-8 times more than the actual EPF remittance.

Also, keep in mind that the PF office sends a copy of the PF code allotment letter to ESI. Based on this, your regional ESI office will send an inspector to review ESI coverage.

In the initial stages of a company, Company Advisors often give incorrect advice in order to save money, leading to complications that become a headache to rectify after several years.

Regards,
Chandru

Since the number of employees exceeds 20, you need to register with P.F irrespective of whether they are eligible for P.F contribution or not.

Regards,

As an employer, payment of contributions is not exempted if employing 20 or more employees, regardless of whether the basic salary is more or less than Rs. 6500, or if the number of employees falls below 20 at a later time. In this scenario, the payment of employer contributions for basic salaries exceeding Rs. 6500 per month is at the discretion of the employer, while contributions up to Rs. 6500 are mandatory and cover all employees under the scheme.

Currently, digitization is in the final stages at EPFO. The payment of contributions and submission of returns are now happening online, making the process more convenient. EPFO is expected to increase awareness in the administrative process with stringent vigilance. Registration is not overly complex; if any difficulties arise, one must meet with the commissioner. Once you apply for registration, your establishment's coverage will be activated automatically.

Regarding the payment of contributions, you must maintain a record of employees, including details of contributions for all employees. These records should be organized in a sequential order of employment numbers and dates of joining. It is essential to complete and submit forms such as Form 11, Form 2, Form 5, and Form 10 diligently.

Thank you.