Navigating PF and ESI: How to Handle Contribution Closure and ESI During Training?

Hi Everyone, I have some doubts regarding PF and ESI. Can anyone provide the correct solutions for me?

PF Contribution Closure Procedure

1. If a company decides to close the PF contribution for employees with a Basic + DA above and below Rs. 6500, what is the procedure?

Stopping ESI During Training

2. Is it possible to stop ESI for a salaried person earning below Rs. 15000 during their training period?

Thanks,
N. Boopathy

You can stop the PF contribution once the employee becomes a PF member, even when their salary exceeds ₹6,500. Even trainees are also eligible for ESIC.

Regards,
Vinod Bidwaik

You can't stop any legal benefits once given to the employees. For the new employees who have to join the organization and have a basic salary above 6500, they can fill Form 11, and there is no need to provide them with PF benefits then. Regarding ESIC, you can't stop ESIC benefits if the employee has a salary of 15000.

Regards,
Upasana

You give wrong advice. If an employer deducts the PF of any of his/her employees, they can't stop the PF deduction until the full and final settlement of the employee, even if their salary goes up to 5 lakh or more per month. However, the employer's contribution is restricted to Rs 780.

I fully agree with Ms./Mrs. Upasana.

Best Regards,
SANJIV GUPTA

Summary of PF and ESI Contributions

The reply that has been given by the members already can be summed up as follows:

• You cannot stop P.F. contribution for all those employees whose pay/wages (Basic + DA + retaining allowance, if any) are Rs. 6,500/- per month and below.

• You cannot stop P.F. contribution for all those employees who are already members of the P.F. Scheme even though their wages exceed Rs. 6,500/- per month. However, you can restrict the employer's contribution to Rs. 6,500/- per month even though the employee seeks to contribute more than Rs. 6,500/- per month.

• The employer is obliged to pay ESI contribution for all those employees whose wages are Rs. 15,000/- and below.

Both the P.F. Act and ESI Act prescribe penalties for breach of obligations of the employer under the respective Acts.

Regards,
B. Saikumar
Mumbai