Can Employees Stop PF Contributions and Claim Accrued Amounts Legally? Seeking Advice on Compliance and ESIC

Dear all, One of my friend's companies has employees who are ready to stop PF contributions and claim the PF amount accrued until now. They wish to continue as new joiners, and their basic salary + DA exceeds 6550/-.

Compliance with PF Act

Now, please advise if the above scenario complies with the PF Act.

ESIC Contributions

Also, can the ESIC contributions be stopped or continued for the same employees under the same employee code? Should they be considered new joiners to start ESIC contributions under the same IP number?

Please provide a detailed explanation.

Thank you.

You cannot stop the contribution to PF under any circumstances. Once an employee is a member of PF, he remains a member of PF until the last. The tactic you are considering adopting is unethical and illegal. If you proceed, you will land in great trouble.

Regarding ESI Contributions

You also cannot take any action regarding ESI. My suggestion is to increase the gross salary of everyone above Rs. 15,000 per month and exclude them from ESIS. This will save a lot of money for your company. If such actions become common, everyone will follow the same tactic as you, and there will be no social security laws in existence in India.

By the way, are you an HR professional? I have noticed in many posts that HR professionals are writing on behalf of their friends, as you have done. If this case is indeed for your friend, why is your friend not writing, and what is your interest in writing for your friend? Please forgive me for asking this question.

Regards

Keshav Korgaonkar is correct that EPF can't be stopped during the continuity of a job. If employees wish to discontinue this facility, they must first tender their resignation, withdraw the same, and after one month, they can join with a new payroll.

Thanks & Regards,

Sumit Kumar Saxena

First, they will have to resign, wait until they withdraw their PF amount, and then join again. What will you do until then? Shut your factory down? In any case, the PF department is likely to investigate and initiate proceedings against you for fraud.