Employer Considering Stopping EPF Contributions: What Happens If Employee Count Drops?

Discontinuing EPF Contributions

It is possible for an employer to discontinue with EPF. If a company has crossed the 20-employee mark and registered for PF but currently has only 10 employees, the company may choose not to contribute towards EPF.

It is not possible to discontinue PF contributions even if the strength of the company falls below the specified range. Once PF is registered, it must and should continue even if the strength alters.

Thanks & Regards,
Srilakshmi Korukonda

All depends upon the various tests laid down by the Supreme Court in the matter of the clubbing of establishments. The main criteria being functional integrality, interdependence, management, and transfer of employees. Whether the closing of one will result in the closure of all, etc.

As per the status provided by you regarding these establishments, prima facie, they are not clubbable. It will be difficult to convince him, but let him provide it in writing, and you represent your contentions in writing. Let the matter be decided by the RPFC under section 7-A. You must submit all your contentions favoring your case.

In case the RPFC decides against your contentions, file an appeal in the Appellate Tribunal, Delhi.

Regards,
Chandok AK
RPFC (Retd.)
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Here, there is no invocation of Section 7A. No authorities of EPF have asked him to cover these establishments, and there is no contention. It is the employer who has a common interest in these establishments, who is interested in covering all three establishments together and wants to contribute his share for the employees, though each establishment does not have 20 persons employed. Then how can he cover all the employees under EPF? I have already told him that he is not legally liable. When many employers are trying to avoid EPF, this gentleman is ready to cover his employees even though he can very well evade it.

Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]

I am sorry for the mistake in facts. The employer can have coverage for all three estates separately on a voluntary basis under Section 1(4) of the Act.

Chandok