EPF contribution - reducing employees share while keeping the gross salary the same - acceptable?

Dear Sir, For Example: My Gross salary is 21000. My Basic salary is 12600. My EPF deduction (Employee share) is Rs1512 per month. My Employer share is Rs.1715. But Our company want to change the system. We planned to deduct Rs.780 (for taking basic as Rs.6500). Employer Share is Rs.885. But Gross salary has no change. This is acceptable in the EPF office. Plz clarify.

Dear Rajan
As per statutory compliance: EPF deduction from employee side is 12% of basic (not more than 6500) and employer side 13.61% only wherein 12% is for EPF,EPS and 1.61% is for GPF, Admin charge of PF,EPS,EDLI. I think u should follow this rule.

Dear Rohit & Prachi,
I thing it's not acceptable in PF office as if you once submitted any contributed amount to any particular account no. that amount you can not reduce.
for Exp. as you are saying current employee contribution is 1512/- now you want to deposit employee share 780/-
this is not acceptable.

Dear Sir,
Shall We start this kind of deduction for new employees?. Is it acceptable?. Please clarify my doubt.
Regards,
R.N.Rajan.

Hi Rajan
I agreed with opinion given by Mr Indrajeet here. PF contribution which once started depositing in a particular PF Account, can not be reduced.
Regards
Devinder

Dear All,
I agree with Mr Indrajeeth statement , once u fix the pf contribution amount it will not reduce and if any new joinees you can apply this ceiling 6500/- rule.
Regrds,
Shivananda VD

Dear Rajan,
Once you started deducting the amount for particular employee now you can not reduce it in PF. However you can do it for new joinee as you can take basic salary is Rs.6500/- & you can deduct Rs.780/- as PF even if their Basic Salary is above Rs.6500/-.
Thanks,
Hetal

yea why not. But for old employee pf reduction u should visit epfo website or ask epfo. As I know if we required permission for higher pf contribution then for less contribution till 780 also we can

There are two different issues. One pertains to Provident Fund .The other pertains to Change of conditions of employment.
Issue 1
It is legally possible to reduce PF contribution by getting letters of acceptance from employees. As long as the members agree to the changed terms, PF Authorities will not raise any objection. I am actually implementing this for an organization now.
Issue 2
Changing terms and conditions unilaterally is not possible. Workmen are covered under Industrial Disputes Act 1947. Management need to give Notice for Change. After arriving at an agreement, the Management can change the deduction pattern. With other employees, even though, there is no legislation like Industrial Disputes Act, Indian Contract Act will be applicable. Hence any change in terms must be specified and the Management must get signature from the employees for agreeing to the changed terms.

Dear Rajan,

I've gone through all the advices above and do not agree with any of the advices other than what Sivasankaran has suggested, however with that too I agree partially.

It is very much possible to change the PF contribution as I have got it for many of my clients and PF department has always agreed with us.

Contributing PF more than the STATUTORY limit, is at the option of Employer because it an additional cost for the company and company has the option to bear it or not. It is not an obligation for the employer to contribute more that what is required legally and at present it is Rs. 780 +EDLI and Admin charges on Rs. 6500/-

You have to simply get it approved in you Board meeting by your Board of Directors. Thats it, and nothing else; and you can start deducting PF on Rs. 6500 with immediate effect.

One more important thing I want to mention about whether you can deduct PF on 6500 for new employee and keep the basic as it is for old employees. The answer is NO. You cannot have discrimination among the employees at it is against the principles of natural justice, though not legally wrong.

Regards,

Kapil