Can Employees Increase Take-Home Pay by Opting Out of EPF and Receiving Employer Contributions?

I wanted to know from HR experts whether an employee can opt out of the EPF Scheme and demand that the Employer's Contribution be paid to him along with his salary, thereby increasing his take-home salary. Does signing Form 11 by that employee, stating that they have never been in PF and that he is voluntarily opting out of the scheme, serve this purpose?

Thanks and regards

If he fulfills the condition in Form 11—that is, he has a starting salary of over 6500 basic + DA and he does not have any existing PF account—he can opt out of PF. However, he cannot ask the company to pay him the employer's contribution.

Employer's Contribution and Salary Compliance

In fact, adding the employer's contribution to salary is an offense under the PF Act. The act provides that the employer cannot reduce salary for compliance with the act. By adding the employer's contribution to salary, the company would be confirming that they had earlier reduced salary to the extent of PF, which is specifically disallowed.

Understanding PF Act Coverage

One should know that an organization is covered under the PF Act subject to certain conditions. Once these conditions are fulfilled, it is obligatory for the employer to cover its employees for PF contributions. However, if the emoluments of the employee exceed the amount prescribed under the Act, then they need not be covered. Furthermore, if all employees are covered under the PF scheme, then it is not open to the employee to opt out of the scheme.

EPF Scheme Coverage and Opt-Out Conditions

If your organization is covered under the EPF Scheme and your wages are below the ceiling for coverage prescribed in the EPF Scheme of 1952, you CANNOT opt out of the scheme.

No, you cannot opt out if your company is registered under EPF. If your company has fewer than 20 employees, then you may opt out from the PF.

Hi,

In Form 11, it asks for earlier membership details. There is no column to declare that one has withdrawn the previous account and is thus an exempted employee. I need help to understand the same.