Employer's Dilemma: Can We Limit PF Contributions to Rs. 6,500 for Contract Workers?

We all know that the contract workers' wages are increasing because of a hike in DA every six months. In our industry, we are covering all the contract workers under PF & ESI.

Query on PF Contributions

Is it the responsibility of the employer to pay PF contributions up to Rs. 6,500/-? We want to restrict the employer's contribution to Rs. 6,500/-. Can we restrict some of the contract workers' PF contributions to Rs. 6,500/- for those who will cross this in the near future, considering we are already paying PF contributions of more than Rs. 6,500/- to some other contract workers who are already drawing more than Rs. 6,500/-?

Kindly clarify.

Regards,
GIRI

Once the contribution is started, he will also be eligible for contribution after crossing the $6,500 threshold.

Regards,
Nitesh Prajapati

You can restrict PF contribution to 12% of Rs 6500 until it is not revised by EP qualifying salary for different people. PF authorities cannot say that if you are contributing on a higher salary with respect to some, you cannot restrict it to 12% on 6500 with others because it is purely a prerogative of the employer to contribute on any amount over Rs 6500 and is often considered as per the contract of employment. The PF cannot demand a single pie more than what is calculated on 6500.

Regards,
Madhu.T.K