Can My Company Deduct ESI Without Providing PF? Seeking Advice on What to Do

Dear All My Seniors,

I am working in a Pvt Ltd. firm that does not provide PF to its staff members and shows their basic salary as more than 6500. However, new employees were members of their previous organization. The company now wants to deduct ESI from all new operators but does not want to pay PF. What should I do? Please suggest.

Thanks & Regards,
Ravinder Singh

Please don't mind me saying this, but your query is not understandable. Is the question related to PF or ESIC?

From what I gather, your company is not registered for PF but contributes to ESIC. Could you please provide the total number of employees in your company?

Your question started with PF and ended with ESI! Are new employees members of the last organization for PF or ESIC? If it's ESIC, there is no issue as you also provide that. However, if it is PF, you can ask them to withdraw the same (presuming your employee strength is below 20 employees and the company does not have a PF registration number).

What guidance are you seeking?

Thank you.

As per my understanding of your query, you mentioned that your organization is not deducting PF since it shows every employee's basic salary as more than 6500. In this context, I would like to provide information that, as per the EPF Act, the minimum salary slab is 6500, and for ESI, the minimum salary slab is 15000 per month. Since in your organization, more than 10 employees' salaries are below 15000, they are eligible for ESI deduction.

I hope I have been able to clarify your doubts.

Regards,
Ratikanta Rath

Could you please share how many employees are working in your organization? If the employee strength of your organization is less than 20, there is no question of deducting PF contributions from employees as the EPF Act is not applicable to your company. However, if the employee strength of your organization is 10 or more, the company will be covered under the ESIC, and there is no other option but to deduct from their gross salary those who are earning 15K or below.

Thank you.