Is PF Payment Required for Contract Employees Over 60? Seeking Clarity

Please clarify whether the payment of PF is mandatory for an employee who is on a contract and has crossed 60 years of age.

Regards,
Usha

There is no bar to deposit PF after 58/60 years of age.

Provident Fund for Contract Employees

What about the PF of contract employees? Is it necessary to pay them PF?

In terms of the PF for contract employees, it is important to understand the legal requirements and regulations in place regarding their entitlement to Provident Fund contributions. Depending on the specific terms of the contract and the nature of the employment arrangement, the obligation to pay PF for contract employees may vary. It is advisable to consult with HR professionals or legal experts to ensure compliance with relevant laws and provisions.

There is no age limit in PF. As long as an employee is in service, you need to deduct their PF and remit it to the PF account, even if the employee is on contract or contractual. After 58, both shares are credited to PF account no. 1.

The HR consultants are advising management that there is no need to deduct PF for employees whose age has crossed 58 years. Is this practice correct?

Contributions towards the pension stop at 58. The pension is contributed by the employer. After 58, both the employee's and employer's shares go into the PF account only. There is no stoppage of PF at 58. PF continues until the employee continues with employment.

Thank you.

If the employee was previously a PF member and has withdrawn the full amount of accumulations in the PF after retirement, he is not to be covered in EPF again (see para 26). However, a person retired from government service who is employed in a company where EPF is applicable shall be covered. He will not be covered in the pension scheme after 58 years.

Regards,
Varghese Mathew

Dear Vaeghese ji, Once again, I have to correct myself. What you said is correct. However, it is not in Para 26. Para 2(f) of the Scheme Para 2(f) of the scheme defines 'excluded employee' as follows:
(i) An employee who, having been a member of the Fund, withdrew the full amount of his accumulations on retirement after 55 or on taking employment abroad.
(ii) An employee whose salary exceeds 6500/- per month at the beginning of his employment.
(iii) An apprentice.

Thank you again for your post.

Best regards,
Regards

An employee, whether contractual or otherwise, is required to be a member of the PF irrespective of age. Please note that contract employees are not excluded in the definition of an employee as given in sec. 2(f) of the PF Act.

However, if you go through the provisions of the PF scheme, there is a provision under para 2(f) in which the excluded employee has been defined. Mr. Varghesema Thew and Mr. Kargaonkar Ji have explained in detail about the provision, which will help you decide whether the concerned employee is an excluded one or not under the provisions of the PF Act/Scheme.

I would like to point out one more thing: in case you find that the concerned employee is an excluded employee, please obtain his PF clearance details with supporting evidence and keep it in your records. Also, obtain a letter from the concerned employee declaring that he has crossed the age of 55 years and has taken his full amount of PF accumulation in the fund as per clause (a) or (c), as the case may be, and is not willing to be a member of PF. Keep this in your records for future reference; this may be required by the Authorities at the time of inspection, etc.

Regards,
Pkjain

Once a member becomes an EPF member, the payment of EPF is mandatory. However, if a member withdraws their EPF amount and then rejoins at a basic salary of more than 6500, then PF deduction is not mandatory.

Considerations for a New Employee Joining with EPF Concerns

What about a candidate joining an organization—perhaps aged less than 50 years—with a basic salary, let's say, of Rs. 6600/- who has never been a member of PF earlier or withdrew all his EPF benefits?

Regards,
V. Balaji

Hi Mr. Kargaonkar, the PF Act is not clear on this. Do we have any document or any sanctity in support of this claim? If so, it would be nice to have one to substantiate this.

Regards,
V. Balaji

Dear Mr. Korgaonkar, You have already cleared his doubt by mentioning the "Para 2 (f)(ii)" of the PF Act in your post.

Regards,
Anirudh

Sorry to differ with you seniors. After 58 years, if the employer and employee both agree to deduct PF, they can proceed; otherwise, there is no compulsion to deduct PF after 58 years. In my firm, we usually ask the employee to resign and rejoin the next day if the employee completes 58 years of age. If they both agree, a 24% contribution will go to the Employee Provident Fund.

One can differ with anyone, but it is appreciable if one differs with fundamental study.

Please provide your employer's name. The PF authority will guide you.

My humble request to you is to kindly seek proper advice and follow it. In this thread, you will also receive an answer, but you seem to want to differ with it.

Regards