Can employee opt out of having their PF deducted from their salary?

Hi,

We have come across a few employees who don't wish to have their salary deducted despite being eligible for the same. So my question is, "Can employees who have a basic salary below the PF limit of Rs. 6,500/- opt out of having their PF deducted from their salary?" If this is possible, what is the procedure to get this done?

Awaiting your prompt answers.

Thanks, Gaurang S

Yes, we should continue to deduct contributions to the amount of 6500/- and not to the above. This is mandatory.

Warm Regards, T. Muralidaran

Hi Gaurang,

No, it's not possible in any case. They must contribute to PF if their basic salary is below Rs 6500/-. It's mandatory. In case they are already a member of PF and their basic salary crosses the limit of Rs 6500/-, in that case, too, they have to continue to be a member of PF. If they are already a member of PF and join a new organization, in that case, they may opt out of PF only if their basic salary is above Rs. 6500, for which they have to give an undertaking to the new employer that they do not wish to be a member of PF. However, this also depends on the company policies because generally, companies do not allow such practices.

Amit Goyal

An employee once enrolled in EPF cannot opt out until the cessation of service. If the salary exceeds the ceiling amount, contributions up to the ceiling limit are statutory.

Abbas.P.S

I shall quote the concerned provision from EPF. (Kindly go through the website: EPFO <link updated to site home> ) Exemptions under the Schemes:

Provident Fund
- An individual member getting Provident Fund benefits on par with or better than statutory provisions can apply for exemption in Form 1 under para 27.
- Employers can apply for exemption in respect of a class of employees getting similar or better benefits than the statutory P.F. Scheme under P. 27A subject to the conditions governing the grant of exemption.
- The employer can seek exemption from the P.F. Scheme for the entire establishment if the majority of the employees also consent for exemption, subject to certain conditions governing the grant of exemption and certain formalities.

Abbas.P.S

Respected Seniors,

Is it possible to opt-out of the PF scheme for those who have voluntarily joined the scheme (with a basic pay of more than Rs. 15k)? They do not want to withdraw the money but want to stop the contribution.

Please advise.

Thanks,
Nikita

Dear All,

Is there any option to not join the PF for an employee who has recently joined the organization with a higher salary than the PF slab, and who was not a member of the PF in their immediate previous company? Although they were a member of the PF scheme in the early stages of their career and have already withdrawn all their PF benefits.

Santosh

If I don't wish to have PF deduction in my new organization, what is the process or any specific format for undertaking this?

Respected Seniors,

My question is: do we need to comply with the new wages code from 1st April 2021 only, or will the applicability of the same be notified by the government later on, as the rules are still pending?

Dear Himanshu,

All the new Labor Codes can be enforced only after the Central Government fixes the date by means of a notification in this regard under each Code. Since the State Rules are not yet framed by many State Governments, the notifications are yet to be issued by the Centre.